The Ren and UMA platforms allow BTC holders to mine liquidity by launching a new $ 1 bitcoin-backed interest rate. The dollar interest rate is similar to a stable coin that has an expiration date.
Ren trusted bridges and UMA-licensed artificial asset platforms have teamed up to launch a Bitcoin-backed Yield called uUSD in addition to the Joint Liquidity Mining Rewards Program. The partnership will lead to products that allow investors to use Bitcoin without the need for an Atrium network license. uUSD is the second UMA interest dollar product after the Atrium interest rate dollar called yUSD, which was launched in July 2020. The idea has been very successful, multiplying more than 10 million yUSD over the past two months. Ren's Twitter account stated:
In partnership with UMAprotocol‌, we are introducing BTC‌-backed interest dollars, along with a shared liquidity mining reward program.
The dollar interest rate is similar to a stablecoin but with a few notable differences. Like futures contracts, it has an expiration date, and as that date approaches, its price approaches $ 1, and upon expiration, it can be repaid for $ 1 of the collateral at the exact time of expiration. Uma describes it as a "fixed-rate, fixed-term loan" because since its multiplication, interest dollars are usually valued at less than $ 1. Users buy renBTC, which is a tokenized bitcoin and competitor to wBTC‌, and lock it in as collateral with UMA to multiply uUSD tokens. These interest dollars can then be used to buy more renBTC or invest in other DeFi protocols.
A new stimulus for Ren and UMA liquidity farming to start collateral deposits will be added to the new interest dollar. This stimulus will enable investors to obtain Ren and UMA tokens to provide UUSD Balancer Pool liquidity that can be paired with the USDC. The renBTC interest rate dollar has a 125% collateral ratio that will be launched on October 1. In order to encourage interest-bearing farmers, the pool will receive 10,000 UMA tokens and 25,000 REN tokens per week in addition to BAL tokens according to protocol calculations. The annual rate is not fixed and depends on the amount of liquidity provided during the week. The offer is positive news for the fast-growing complex bitcoin market, allowing interest farmers to use their BTC assets on ERC-20-based protocols. Over the past three months, the amount of Bitcoin tokenized in the Atrium network has increased by 1,350 percent, and according to btconethereum.com, it is currently just under 78,000 BTC. Of these, about a quarter, or 18,732, are renBTC.