Finance, btc, Yield, DeFi Umoja achieves the yield by the use of coated calls and arbitrage.
Decentralized finance (DeFi) protocol Umoja has launched a product that allows Coinbase wrapped BTC (cbBTC) token holders to earn a 6% yield on layer-2 group Base.
Umoja achieves its yield by tapping into a wide range of centralized and decentralized change strategies along with coated calls and arbitrage, which entails purchasing for an asset at on one venue and concurrently selling it for a greater worth on one different venue.
It’s worthing noting that cbBTC is a wrapped token and by no means bitcoin (BTC) itself, it is an erc20 token backed 1:1 by bitcoin held at Coinbase.
The Umoja protocol helps loads of Yield Vault Tokens (YVTs) collateralized by cryptocurrencies (along with precise world asset tokens).
One of those YVTs is yBTC, which is minted as quickly as clients deposit cbBTC on the protocol.
Acquiring a yield on BTC using DeFi strategies has been a controversial matter for bitcoin maximalists, who’re sometimes towards the DeFi sector and altcoins.
However, 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 identify price losses seems set to increase.
Japanese company Metaplanet has recently started to earn a yield on bitcoin by shopping for spot belongings concurrently put selections, then selling premium on put selections as worth slumps.
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