Retail investors looking to tap into Bitcoin’s DeFi potential could do a whole lot worse than taking a look at USDb, a new kind of high-yield, synthetic dollar crypto asset that’s built on Merlin Chain’s Layer-2 infrastructure.
The USDb asset is the first “Synth” created by the smart money protocol Umoja, which has set itself the goal of providing retail investors with access to the same kinds of advanced trading strategies that were once exclusive to the world’s biggest hedge funds and institutions.
Umoja believes that the path to wealth creation is blocked for many retail investors due to what it calls the “ROI Paywall Barrier”, which refers to the notion that it’s almost impossible for regular individuals to accumulate life-changing wealth, as they cannot employ the most sophisticated money-making technologies.
What Umoja is essentially doing is tokenizing the most profitable, algorithmic trading strategies employed by hedge funds and the like, and making them available to anyone who wants to use them. Central to this effort is Umoja’s concept of “Synths”, which are special crypto tokens that utilize traditional financial trading instruments to generate high yields for investors.
USDb is the first publicly available Synth, and it’s building on the efficient Merlin Chain L2 network, which provides smart contract capabilities that open the door to native Bitcoin DeFi.
Unlike traditional stablecoin assets, USDb doesn’t rely on collateral or algorithmic balancing acts. Whereas USDC is backed by real paper money and liquid assets, and the DAI stablecoin uses algorithms to maintain its dollar peg, USDb is entirely reliant on Umoja’s transparent trading strategies. It’s designed to pool Bitcoin user’s resources and leverage this capital to power its transparent, on-chain trading strategies in the crypto derivatives market and other DeFi protocols, providing higher yields and an attractive passive income for token holders who trust its algorithms to do their job. According to Umoja, the potential returns of USDb are far higher than those offered by any other stablecoin asset.
Merlin Chain plays a key role in this, as its native BTC Layer-2 network facilitates the smart contract capabilities for Bitcoin-based assets that are needed to pull this off. That’s because Umoja has built its algorithms to take advantage of the rapidly-growing but still somewhat nascent Bitcoin DeFi ecosystem, and Merlin Chain is what ensures its protocol can scale appropriately.
Merlin Chain is a relatively new Bitcoin L2, only launching its testnet in January, but it has already grown to encompass more than $3.4 million in total value locked, underscoring the crypto community’s strong appetite for greater Bitcoin utilization.
Umoja founder Robby Greenfield said it will be the most decentralized, accessible, lowest-risk and highest-yielding form of money that will ultimately become the world’s most widely-adopted financial asset. “Such money can only be built on top of Bitcoin,” he added.
The partnership between Umoja and Merlin Chain is a key milestone for the industry, representing one of the first real-world instances where Bitcoin’s foundational strength is being paired with the innovative capabilities of DeFi to make wealth creation more accessible.