Thala and Mountain Protocol Partner to bring Real World Assets to Aptos

Thala Labs
6 min readMay 22, 2024

Thala is bringing Mountain Protocol’s Yield-Bearing Stablecoin USDM to Aptos

Thala is excited to announce an integration with Mountain Protocol’s wUSDM, powered by LayerZero. This marks another pivotal step in bringing tokenization to the Aptos ecosystem and cementing Thala’s position as the leading liquidity hub for all assets.

Why RWAs?

Real World Assets (RWA) bring a range of off-chain financial assets to the blockchain, encompassing everything from real estate to credit, from T-bills to green bonds. The tokenization of RWAs aids in creating a global financial infrastructure that is programmable, composable, and operational 24/7. According to estimates from BCG’s report, the tokenization of RWAs could reach a staggering $16 trillion by 2030. The adoption of RWA is accelerating, driven by the demand for stable yields in DeFi, although the current adoption still represents only a small fraction of its potential.

Tokenized treasuries have ballooned to over $840 million in issuance since the start of 2023, with this growth being largely fueled by rising treasury yields and crypto-natives searching for robust yields beyond existing solutions.

Mountain Protocol and USDM

Mountain Protocol offers an institutional-grade stablecoin (USDM), built on the pillars of safety and compliance. USDM is a fully backed stablecoin, supported by “USDM Reserves” pegged at a 1:1 ratio with USD. It’s also the first permissionless yield-bearing stablecoin. USDM is collateralized by short-duration US Treasuries (T-Bills) with an average duration of 60 days or less.

Key features of USDM include:

  1. Instant liquidity via multiple OTC USDC-denominated lines of credit.
  2. A rebasing ERC20 token, redeemable at a pegged 1:1 USD value by primary users. It distributes yields via rebasing mechanism i.e the amount of tokens keeps increasing for a user to accrue the yields.
  3. Backed by “USDM Reserves”, which are held under custody with regulated financial institutions in bankruptcy-remote accounts.

According to DeFilLama, USDM has a TVL of approximately $52 million, yielding an APY of 5% as of May 22, 2024, and is live on multiple chains such as Ethereum, Polygon, Arbitrum, and more.

wUSDM is coming to Aptos via LayerZero:

USDM is an ERC4626 vault token, backed by U.S. Treasury bills (T-bills). Mountain Protocol wil leverage on Layerzero to seamlessly connect existing USDM liquidity with Aptos. LayerZero enables secure and permissionless bridging of wUSDM from Ethereum to Aptos for use on Thala. The bridge is active and integrated into the Aptos Bridge, powered by LayerZero.

wUSDM, a Layerzero wrapped version of USDM, is non-rebasing in nature. The bridged asset on Aptos will be entirely permissionless, meaning any user can freely transfer their wUSDM, deposit it into smart contracts, and interact with DeFi protocols.

Thala — The Liquidity Hub for RWAs

Thala’s suite of products were built with composability in mind — enabling innovation and meaningful integrations of quality assets such as USDM. In the coming days, Thala will onboard wUSDM across various several products:

  1. Liquidity Pools — wUSDM liquidity will be seeded on ThalaSwap, with $THL and $APT incentives.
  2. MOD Stablecoin Collateral — Thala is working with oracle providers such as Pyth and Switchboard to enable USDM price feeds. With upcoming oracle integrations, wUSDM will become available as a CDP collateral against MOD — enabling permissionless access to leverage wUSDM and its robust yields.
  3. PSM — The protocol will explore onboarding wUSDM onto the MOD peg stability module (PSM) in the near future via governance on Parliament.

About Thala

Thala is a decentralized finance protocol powered by the Move language, enabling seamless borrowing of a decentralized, over-collateralized stablecoin, Move Dollar, and capital-efficient liquidity provisioning via a rebalancing AMM on the Aptos blockchain.

Website: http://thala.fi/

Foundry: https://thalalabs.typeform.com/foundry

Discord: https://discord.gg/thala

Twitter: http://twitter.com/thalalabs

Documentation: https://docs.thala.fi

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Thala Labs

Thala is a decentralized finance protocol on the Aptos blockchain.