The dollar balance is backed by USDB, a stablecoin issued by Brale on the Spark network.
According to Breez’s statement, maintaining a balance in USDB generates daily returns paid in BTC.
The Breez development team announced this April 14 the launch of Stable Balance, a new feature of its SDK (developer toolkit) that allows any application to offer its users a balance in dollars while still using bitcoin (BTC) to send and receive payments.
The problem you seek to solve is BTC price volatility which for some users would make it difficult to use it as everyday money. Breez’s statement emphasizes that a user who receives bitcoin today can see their balance reduced by 30% tomorrow without having done anything. For example, considering the current price of BTC of USD 74,000 and the last all-time high of USD 126,000 marked last October, the market value of bitcoin fell by 41%.
Stable Balance targets that problem and once a developer integrates it into their app, their users can activate it and maintain their balance in dollars while payments continue to flow on the Bitcoin rails.
How does the Breez SDK work?
According to explained by the Breez team, when a user activates Stable Balance in an app that integrates it and receives bitcoin, the SDK automatically converts received satoshis (minimum unit of BTC) to dollars. When you send a payment, it converts back to sats on the spot. The user sees at all times a dollar balance that does not move with the price of bitcoin.
The dollar balance is backed by USDB, a stablecoin issued by the Brale company on Spark, a second layer (L2) network designed for faster and cheaper payments than the base layer.
Conversions are executed through Flashnet, a decentralized exchange (DEX) that also operates on Spark. The Breez SDK manages that entire process internallywithout the developer or the user having to interact with those systems directly.
The balance in dollars, being backed by USDB implies that the user places trust in that issuerwhich introduces a third-party dependency.
Passive returns with the Breez SDK
On the other hand, Breez highlights an additional advantage of Stable Balance. Users who hold USDB generate a return (yield) that is paid daily in BTC, without additional steps.
According to the documentation Spark official, USDB is a native Spark dollarized stablecoin that offers between 3.5% and 6% APY (Annual Percentage Yield) paid in BTC every day at midnight (00:00 UTC). Performance varies depending on daily trading volume on the network:
- 3.5% with low volume.
- Up to 6% when the volume exceeds $25,000 daily.
- To receive rewards it is necessary to maintain a minimum balance of 10 USDB.
Finally, according to the statement, the functionality is available from April 14 to all developers using the Breez SDK. The company’s reference application, called Glow, already has it active as the first implementation example.