Injective Integrates Mountain Protocol Offering USDM Stablecoin as Collateral for Derivatives

Injective,

a Cosmos Layer-1 blockchain for finance, said it has integrated with Mountain Protocol, the issuer of USDM, the yield-bearing stablecoin.

This integration will allow its users to earn yield on USDM’s Treasury Bill (T-Bill) backed assets while using it as a margin for trading derivatives, said the firm.

T-Bill’s are short-term debt securities issued by the government to raise funds. They are considered one of the safest investments since they are backed by the government’s credit.

The introduction of USDM is a significant addition to real-world assets (RWAs) in the Injective system, allowing users to directly earn yields that would traditionally go to third parties, said the firm.

TradFi and DeFi Models Combined

“Injective’s collaboration with Mountain Protocol unites traditional and decentralized models to a point where everyday users can leverage the advantages of both models,” said Eric Chen, co-founder and CEO of Injective Labs.

“The availability of compliant stablecoins like USDM expands transaction opportunities using institutional grade RWAs, with US Treasury support ensuring both long-term security and sustainability,” said Chen.

USDM Stablecoin Backed by T-Bills

Injective notes that USDM is different from other mainstream stablecoins, such as USDC stablecoin.

The USDM stablecoin is backed by T-Bills held within the USDM reserves. Another notable factor is that USDM reserves are held under custody by several financial institutions and audited by OpenZeppelin, a firm involved in securing blockchain applications and smart contracts.

The protocol notes another advantage of USDM is its liquidity across compatible decentralized exchanges and protocols. Users will experience a trading environment similar to that of non-tokenized T-Bills on traditional centralized exchanges.

“We’re seeing a high level of interest in USDM in the market, evidenced by its trading volume and secondary market liquidity nearly doubling that of other yield-bearing stablecoins,” said Martin Carrica, co-founder and CEO of Mountain Protocol.

First Time USDM Used as Margin for Trading Derivatives

This integration is also the first time USDM is being used as margin for trading derivatives, claims Injective. Those users trading with USDM can be involved in on-chain markets while earning a yield.

Chen said USDM is a major milestone in Injective’s path to converge TradFi and DeFi by continually bringing new RWAs. Helix, the premier decentralized exchange (DEX) part of the Injective system, currently offers EU, US, and APAC currency pairs plus commodity pairs including gold, and silver.

Helix will be the first dApp to offer and utilize USDM for trading derivatives, notes Injective.