Tortola, British Virgin Islands, July 12th, 2023, Chainwire – Struct Finance, a DeFi platform that enables investors to engage with tailored interest rate products linked to digital assets, has launched the BTC.B-USDC Vaults.
The tranche-based Interest Rate Product was made possible through the use of Avalanche’s BTC.B (Bridged Bitcoin) for DeFi applications. It effectively complements the existing Genesis USDC Vaults, bringing forth a new era in DeFi yield opportunities. Struct Finance built the vault on top of GMX’s Liquidity Provider Token (GLP) to generate both fixed returns in the form of BTC and variable returns in the form of USDC, while still ensuring the security of the asset and minimizing volatility and exposure to other risks.
Ersin Dalkali, the Co-founder of Struct Finance, said, “Our BTC.B-USDC Vaults represent an innovative application of Bitcoin in DeFi. We’re taking full advantage of Avalanche’s Bridged Bitcoin (BTC.B) to bring about a fresh wave of opportunities in the digital asset space.”
Bitcoin’s lack of a DeFi layer has traditionally made yield generation quite challenging. BTC.B is minted via Avalanche Core – a decentralized bridge – and can be trustlessly bridged across networks using the Layer Zero bridge. This increases the yield generation potential of Bitcoin investments, compared to the 0.2–0.5% yield from lending pools and 2% from stable swap pools offering wBTC-BTC.B products.
The recent approval of a 2X leveraged Bitcoin ETF by the US Securities and Exchange Commission (SEC) indicates a readiness in the traditional financial realm to embrace Bitcoin on a new level. With over 6000 BTC bridged and a fully diluted value of $180 million, BTC.B is becoming a significant player in the crypto arena.
Struct Finance’s Interest Rate Products allow anyone to split and repackage the risk of any yield-bearing DeFi assets in different parts to fit their risk profile. This process is called “tranching.” Every Interest Rate Product is a single vault split into two portions – a Fixed-return Tranche for conservative investors looking for consistent returns, and a Variable-return Tranche for investors with a higher risk appetite seeking superior returns.
Moreover, Struct Finance has implemented a unique approach to managing investment risk called delta hedging. Upon deployment of funds into the vault, the BTC.B in the fixed tranche gets converted into GMX’s GLP token, setting up a position that’s short Bitcoin against GLP and contributing a negative delta. In contrast, the USDC on the variable side is converted into GLP, which inherently carries a positive delta. This innovative product design achieves a balance between the positive and negative delta forces, allowing investors to confidently navigate the crypto market’s inherent volatility.
Struct Finance is at the forefront of the DeFi revolution, with a vision to transform the design and utility of financial products. It aims to empower users to design their own financial instruments and harness the power of tokenized, yield-bearing positions to unlock a world of diverse investment opportunities. Initially available on Avalanche, Struct Finance plans to go multichain in the near future.
Disclaimer: This release is for informational purposes only and should not be construed as financial promotion.
For more information, contact Miguel Depaz at [email protected]
