Decentralized finance (DeFi) protocol Umoja has launched a product that enables Coinbase wrapped BTC (cbBTC) token holders to earn a 6% yield on layer-2 community Base.
Umoja achieves its yield by tapping into a spread of centralized and decentralized alternate methods together with coated calls and arbitrage, which includes shopping for an asset at on one venue and concurrently promoting it for the next value on one other venue.
It is worthing noting that cbBTC is a wrapped token and never bitcoin (BTC) itself, it’s an erc20 token backed 1:1 by bitcoin held at Coinbase.
The Umoja protocol helps a lot of Yield Vault Tokens (YVTs) collateralized by cryptocurrencies (together with actual world asset tokens).
A kind of YVTs is yBTC, which is minted as soon as customers deposit cbBTC on the protocol.
Buying a yield on BTC utilizing DeFi methods has been a controversial matter for bitcoin maximalists, who’re typically against the DeFi sector and altcoins.
Nonetheless, as BTC continues its plunge from above $100K to the April 7 low of $74.8K, investor demand for attaining a yield to mitigate in opposition to spot worth losses seems to be set to extend.
Japanese agency Metaplanet has lately began to earn a yield on bitcoin by buying spot property concurrently put choices, then promoting premium on put choices as value slumps.
