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Bitcoin's economic layer is now live. A novel DeFi protocol currently operating enables users to lock BTC and mint MUSD on a 1:1 USD basis. The borrowing mechanism stands out—fixed 1% APY up to 90% LTV, dramatically undercut compared to Ethereum's 20%+ rates.
What makes this compelling? Liquidity provisioning on major DEX platforms like Uniswap v4 and Curve generates 30%+ APY returns. This creates a genuine earn-while-you-spend dynamic: participants lock Bitcoin, access stablecoin liquidity, deploy capital across yield opportunities, and their collateral continues accruing rewards.
The competitive advantage is clear. By anchoring directly to Bitcoin rather than bridged or wrapped representations, the protocol eliminates counterparty risk inherent in traditional wrapped assets. Combined with sub-market borrowing costs, this reshapes how Bitcoin holders think about capital efficiency. The 30%+ yield on liquidity pairs makes this particularly attractive for those seeking alternatives to passive holding.