The new vaults enable unprecedented use of Avalanche’s BTC.B in DeFi applications
In its ongoing journey to reshape the crypto investment landscape, Structural Financea DeFi platform that allows investors to engage in tailored interest products tied to digital assets is pleased to announce the launch of the BTC.B-USDC Vaults.
The tranche-based BTC.B-USDC interest rate product was made possible by effectively leveraging Avalanche’s BTC.B (Bridged Bitcoin) for DeFi applications. The new vault is a wonderful addition to Struct Finance’s Genesis USDC Vaults and ushers in an exciting era in DeFi revenue opportunities.
Struct Finance built the new vault on top of GMX’s Liquidity Provider Token (GLP) to generate predictable returns for BTC in the form of fixed returns, and USDC in the form of variable returns, while still leveraging a safe asset and the volatility and minimize exposure to risk. other risks.
“Our BTC.B-USDC Vaults represent an innovative application of Bitcoin in DeFi. We take full advantage of Avalanche’s Bridged Bitcoin (BTC.B) to create a new wave of digital asset opportunities”, says Ersin Dalkali, co-founder of Struct Finance.
While Bitcoin continues to dominate the market, its inherent lack of a DeFi layer has traditionally made native yield generation quite challenging. Avalanche has unlocked new possibilities for Bitcoin in DeFi with BTC.B (Bridged Bitcoin).
Unlike WBTC, which relied on centralized bridges, BTC.B is minted through Avalanche Core – a decentralized bridge – and can be reliably bridged across networks using the Layer Zero bridge.
Currently, Bitcoin investments in prominent loan pools yield between 0.2 and 0.5%. Even the stable swap pools that offer wBTC-BTC.B products only manage to get around 2% returns. Struct’s BTC.B-USDC product shatters these limitations and offers significantly higher yields.
The purpose of BTC.B is to enable BTC holders to explore DeFi opportunities on the Avalanche blockchain, without the need to acquire secondary tokens or rely on centralized bridges. BTC.B represents BTC coins transferred to the Avalanche blockchain in the form of ERC-20 tokens. With over 6000 BTC bridged and a fully diluted value of $180 million, BTC.B carves a niche for itself in the crypto arena.
The Bitcoin ETF applications from BlackRock, WisdomTree and Invesco – three of the world’s leading asset managers – are not just another submission. It is a signal that the traditional financial world is ready to embrace Bitcoin on a new level. Recently, the US Securities and Exchange Commission (SEC) gave the green light to a 2X leveraged Bitcoin ETF, sparking an enthusiastic wave of speculation and anticipation for approval of a spot Bitcoin ETF.
Delta cover
Amidst the highly volatile crypto industry, Struct Finance’s interest rate products enable anyone to break down and repackage the risk of yield-bearing DeFi assets into different parts to fit their risk profile through an innovative process that is called “tranching”. Each interest product is a single vault split into two parts or tranches with different yield configurations:
- A fixed return tranche for conservative investors looking for consistent returns
- A variable return tranche for investors with a higher risk appetite seeking superior returns
The returns from the underlying asset first flow into the fixed tranche to ensure a predictable return. The remainder is then allocated to the variable tranche, which gains greater exposure to the underlying yielding assets. Compared to the fixed tranche, the variable tranche may yield more, less or no return.
As part of its BTC.B-USDC Vaults, Struct Finance has implemented a unique approach to investment risk management: delta hedging. While the fixed tranche takes center stage with its high yield, the variable side of the product provides an additional layer of intriguing complexity and potential.
After deploying funds into the vault, the BTC.B in the fixed tranche is converted to GMX’s GLP token, creating a position that is short Bitcoin against GLP and contributes a negative delta. In contrast, the USDC on the variable side converts to GLP, which inherently has a positive delta.
This innovative delta-hedged product design provides a fine balance between the positive and negative delta forces. It results in a robust strategy that allows investors to confidently navigate the inherent volatility of the crypto market.
This artful interplay of the fixed and variable sides within the vaults opens the doors for investors to tap into the potential of Bitcoin investments like never before. By catering to a wide range of risk appetites, Struct Finance ensures that both retail and institutional investors can adjust their strategies to maximize returns, regardless of market conditions.
About Structural Finance
Struct Finance is at the forefront of the DeFi revolution, with a vision to transform the design and usability of financial products. It allows users to design their own financial instruments, leveraging the power of tokenized, yield-bearing positions to unlock a world of diverse investment opportunities.
In addition, the advanced financial products use a tranche-based system, which cleverly distributes returns across different investor classes. This balanced approach guarantees stable returns for risk-averse investors while offering the prospect of higher returns for the more adventurous investors. Initially available on Avalanche, Struct Finance plans to go multichain in the near future.
For more information visit:
Website: https://www.struct.fi/
Twitter: https://twitter.com/structfinance
Discord: https://discord.gg/kngan3PD
Telegram: https://t.me/struct_finance_announcements
For media enquiries, please contact: Miguel Depaz, co-founder, media@struct.fi
Disclaimer: This is a paid post and should not be treated as news/advice.