Umoja announced yBTC, a yield vault token that provides over 20% annual percentage yield on staked Bitcoin.
The launch positions yBTC as the highest-yielding product for native Bitcoin, reflecting growing opportunities for BTC holders in DeFi, according to a note shared with crypto.news.
Yield vault tokens like yBTC allow users to earn passive income by staking their Bitcoin (BTC). Each token represents a user’s share in a vault, which generates returns by employing yield strategies across DeFi protocols and centralized exchanges.
Umoja’s trade engine optimizes these strategies based on market conditions, providing competitive yields regardless of market trends.
“yBTC offers up to 30% APY, adjusted based on market conditions, powered by the Umoja Trade Engine,” Robby Greenfield IV, CEO and Founder of Umoja Labs, told crypto.news.
The UTE adjusts strategies to optimize performance, according to Greenfield. It reallocates funds from underperforming strategies to better ones based on market conditions in a move deemed “dynamic strategy toggling” by Umoja.
“Currently, with our BTC Delta Neutral Strategy, the APY range is between 5% and 30%. The UTE integrates protocols, custodians, and centralized exchanges like Binance, OKX, Bybit, GMX, Ceffu, and Cobo to facilitate multiple quantitative and DeFi strategies in parallel,” Greenfield said.
Security and transparency concerns
To address concerns over security, Umoja’s protocol has undergone audits by Quantstamp, Hacken, Certik, and Cyberscope.
Meanwhile, all BTC collateral is stored with institutional custodians like Ceffu and Cobo, ensuring asset safety.
“Umoja is one of very few compliant DeFi protocols. We provide thorough terms of use and risk disclosures necessary to protect end-users leveraging two off-shore entities dedicated to the Umoja ecosystem,” Greenfield said.
Bitcoin’s presence in DeFi is growing, with approximately $2.35 billion currently locked in decentralized protocols. Umoja aims to expand this ecosystem by providing a sustainable, straightforward yield solution for BTC holders.
Unlike some platforms that offer inflated or misleading APYs through complex mechanisms, yBTC’s advertised 20%+ APY is transparent and directly tied to real yield strategies.
yBTC also offers flexibility, allowing users to earn yield without committing to long lock-up periods or navigating the complexities of arbitrage or liquidity provision.
APY paid in 100% Bitcoin
Withdrawing yBTC is a straightforward process. To get back your BTC principal along with any earned yield, need to use the protocol’s “Burn” feature to destroy their yBTC tokens.
However, it’s important to note that burning yBTC also requires you to burn a certain amount of UMJA tokens. This entire procedure is typically quick, often finalizing within an hour, though it may vary based on Bitcoin’s network block times.
The protocol imposes two types of fees: an 18% performance fee, which is taken from the yBTC APY, as well as trade entry and exit fees associated with minting and burning the yBTC tokens, according to Greenfield.
This product as a whole caters to BTC holders seeking reliable income while avoiding the risks often associated with volatile strategies.
“The BTC ecosystem is fraught with diluted APRs and APYs that aren’t what they seem to be,” Greenfield said. “Nearly every BTC LST in crypto markets an APR that includes protocol points and foreign token rewards – rather than the ROI that’s paid in BTC alone. yBTC’s APY is paid 100% in BTC – nothing else”
