Hermetica raises $1.7 million seed funding to boost Bitcoin DeFi with USDh

Decentralized finance (DeFi) has shifted the traditional balance of power between banks and their customers, transforming how people approach money. Today, DeFi creates new pathways for passive income through yield-bearing synthetic assets such as staking and lending. At the forefront of this movement is Hermetica, the creator of USDh—the first Bitcoin-backed, yield-generating synthetic dollar.

Today, Hermetica announced it has closed a $1.7 million seed funding round, led by UTXO Management, with backing from key investors like CMS Holdings, Ethos Fund, Trust Machines SPV, Newman Capital, and Silvermine. Strategic angel investors, including Tycho Onnasch (Zest Protocol), Robin Obermaier (Liquidium), Mithil Thakore (Velar), Matt Maduno (Arch Network), and GM Chung (DeSpread), also participated.

This new funding will accelerate the growth of USDh, which is issued natively on Bitcoin Layer 1 via Runes and on Layer 2 through the Stacks network. USDh is already available for purchase on decentralized exchanges.

With the global stablecoin market doubling year over year, now surpassing $160 billion and representing 50% of all on-chain transactions, USDh is poised for significant growth. Although Bitcoin boasts a $1.3 trillion market cap, only 1% of its value is currently locked in DeFi, leaving a massive untapped potential of over $1 trillion that USDh aims to unlock.

Hermetica’s goal is to empower Bitcoin users to hold and transact with a stable, liquid dollar asset, redeemable for Bitcoin (1 USDh = 1 USD worth of Bitcoin). This allows participants to keep their assets within the Bitcoin ecosystem without converting to fiat.

“We see stablecoins as crucial for a decentralized financial system. USDh is the ideal Bitcoin-backed stablecoin—efficient, independent of the fiat system, and yield-generating,” said Jakob Schillinger, CEO of Hermetica Labs.

The funds raised will drive further integrations for USDh within the Bitcoin ecosystem, improving liquidity, forging institutional custodial partnerships, and developing scalable off-exchange settlement options. Hermetica is focused on leveraging Bitcoin’s security to offer a decentralized alternative to traditional fiat-backed stablecoins.

Investors have expressed confidence in Hermetica’s vision:

“USDh is a major breakthrough for Bitcoin-backed stablecoins. Hermetica’s approach to delta-hedging positions USDh as a key player in the stablecoin market. We’re thrilled to support Hermetica’s leadership in Bitcoin DeFi,” said Tyler Evans, Managing Partner at UTXO Management.

“Hermetica is unlocking immense value within the Bitcoin ecosystem with USDh. Their seamless integration of stablecoins into Bitcoin’s Layer 1 and Layer 2 networks is a huge opportunity. USDh is set to become a crucial tool for Bitcoin users seeking stability without leaving the network,” added Simon Shin, Managing Partner at Ethos Fund.

Hermetica’s team brings deep expertise in financial technology, with experience from institutions like Kraken and State Street. Their focus is on creating innovative products that capitalize on Bitcoin’s transparency and security. Users can earn up to 25% APY on USDh through app.hermetica.fi.

The Stacks network, a Bitcoin Layer 2, enables smart contracts and decentralized applications to use Bitcoin’s security as a base layer. The upcoming Nakamoto and sBTC releases will bring faster transactions, fully secured by Bitcoin. Stacks is currently the leading Bitcoin Layer 2 by developer traction and market cap, with the potential to unlock Bitcoin’s $500 billion in passive capital, turning it into a productive, programmable asset.

The Stacks (STX) token, used as gas on Layer 2, was the first to undergo an SEC-qualified sale in the U.S., with the network fully decentralizing in 2021. The Stacks ecosystem now includes more than 30 contributors, from non-profits like the Stacks Foundation to developer tools providers like Hiro, and various entities such as Xverse, Trust Machines, and ALEX.

Hermetica seed funding round