Injective Integrates Mountain Protocol To Offer USDM As Collateral For Derivatives
In Brief
Injective integrated with Mountain Protocol to enable users earn yield on USDM’s T-Bill backed assets and use it as margin for trading derivatives.
Blockchain platform Injective, optimized for financial applications, announced its integration with the Mountain Protocol, the issuer of USDM, the first regulated, permissionless, and yield-bearing stablecoin. This integration allows users to earn a yield on USDM’s Treasury Bill (T-Bill) backed assets and use USDM as a margin for trading derivatives. It also represents the first time USDM can be utilized as a margin for trading perpetual contracts within the wider cryptocurrency sector.
“While stablecoins have become a staple in the crypto industry, many users may not fully grasp their underlying mechanics,” said Eric Chen, CEO and co-founder of Injective Labs, in a conversation with MPost. “Typically, stablecoins are pegged to a specific asset and backed by a reserve of fiat currency, often held in Treasury bills that earn a specific yield defined by the US Treasury—an asset considered safe and regulated. Traditionally, stablecoin issuers retain this yield for themselves. However, Mountain Protocol disrupts this model by returning that yield percentage back to the user. This approach truly exemplifies the essence of decentralized and democratized finance, making financial benefits accessible to all,” he added.
The introduction of USDM represents a notable enhancement to real-world assets (RWAs) within the Injective ecosystem. It allows users to directly earn yields that would typically be allocated to third parties.
USDM stands out from other stablecoins, such as USDC, due to its backing by T-Bills held within the USDM Reserves. These T-Bills are considered among the safest and most regulated USD assets. The USDM Reserves are managed by several reputable global financial institutions and audited by blockchain security firm OpenZeppelin. One key benefit of USDM is its liquidity across compatible decentralized exchanges and protocols. With the aim of Injective, users will experience a trading environment akin to that of non-tokenized T-Bills on traditional centralized exchanges.
The integration represents an initial opportunity for USDM to be used as a margin for trading derivatives, improving capital efficiency and returns by generating passive income even when the funds are locked. As a result, users trading with USDM can engage in on-chain markets while also earning a yield. This approach will reduce opportunity costs, enhance risk management by offsetting potential losses with yield, and increase market liquidity and stability. Furthermore, by diversifying income sources and aligning incentives among stakeholders, this integration is set to optimize USDM for daily use.
Helix DEX First To Integrate USDM For Derivatives Trading
Injective Protocol is a decentralized finance (DeFi) platform providing a decentralized exchange (DEX) for trading derivatives and futures. It enables permissionless trading with zero gas fees and operates on a Layer 2 blockchain, ensuring high speed and scalability. The platform supports a range of financial markets, including cryptocurrencies, synthetic assets, and non-fungible tokens (NFTs).
The latest integration is a major advancement in Injective’s effort to bridge traditional finance (TradFi) and DeFi by consistently integrating new RWAs. Among the first decentralized applications (dApps) to incorporate and utilize USDM for trading derivatives will be Helix. It represents a DEX within the Injective ecosystem, providing currency pairs for the European Union, United States, and APAC regions, as well as commodity pairs like gold and silver, with plans to expand further.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
