Saturn raises $800,000 to launch Bitcoin stablecoin, the logic behind the 11% yield

Saturn announced today that it has completed a $800,000 funding round, with participation from well-known institutions such as YZi Labs, Sora Ventures, and angel investors. This funding will be used to develop USDat, a stablecoin protocol supported by Bitcoin that promises an annual return of over 11%. This funding signals that, despite the dominance of giants like USDC and USDT in the stablecoin sector, some projects are still attempting to find breakthroughs through innovative mechanisms.

Where is the product innovation?

Bitcoin-backed stablecoin

The core feature of USDat is that it is supported by Bitcoin. This differs from traditional stablecoins. Conventional stablecoins (like USDC, USDT) are mainly backed by USD reserves or other traditional assets, whereas USDat chooses Bitcoin as its primary collateral. According to the latest data, Bitcoin’s current market cap is $1.83 trillion, accounting for 58.88% of the market. As the largest crypto asset, supporting stablecoins with Bitcoin is feasible in terms of asset scale.

Yield mechanism design

Saturn states that an annual return of over 11% is provided through Strategy perpetual preferred shares STRC. This means that users holding USDat can not only enjoy the basic functions of a stablecoin but also earn additional income by holding STRC. This design aims to address a common pain point of traditional stablecoins: they usually do not generate yields themselves, and users’ idle funds can only earn returns through lending protocols.

Understanding the market significance

A new attempt at on-chain digital credit

In its funding announcement, Saturn mentioned that USDat will unlock access to global on-chain digital credit. This implies that Saturn’s goal is not just to create a stablecoin but to build a complete credit ecosystem. High-yield stablecoins can serve as collateral or liquidity sources to support more on-chain lending activities.

Signals from the background of the investors

Participants include YZi Labs and Sora Ventures. These institutions are somewhat well-known in the crypto space, and their participation indicates recognition of this direction. Additionally, the involvement of multiple angel investors suggests that the project has garnered considerable attention within the industry.

Challenges faced

While the innovation is attractive, high-yield stablecoins face several practical issues:

• Source of yields: How sustainable is the 11% return? It’s crucial to clarify whether these yields come from protocol fees, lending interest, or other sources.
• Bitcoin volatility: Although USDat is a stablecoin, backing it with Bitcoin means the underlying assets are volatile. Effective risk management mechanisms are essential.
• Market competition: The stablecoin sector already has mature players. New projects need to find sufficient differentiation to attract users.

Future points of focus

Saturn’s funding move warrants ongoing observation. Key points include: when USDat will go live, initial liquidity scale, whether the actual yield can meet the promised 11%+, and how the Bitcoin-backed stablecoin mechanism performs in practice.

Summary

Saturn’s funding reflects that the stablecoin sector is still seeking innovation. By supporting Bitcoin and offering high yields, USDat aims to open new possibilities within the existing landscape. However, the sustainability of high-yield promises, effective risk management, and market acceptance are critical factors for the project’s success. For investors, it’s important to have a clear understanding of the underlying logic of such new stablecoins rather than being solely attracted by the yield figures.