Decentralized mortgage lender Bacon Protocol officially launched on Tuesday, allowing cryptocurrency investors to participate in the housing marketplace through a new stablecoin that's backed by USD Coin (USDC) and abode loans.

In addition to launching its protocol, Bacon announced Tuesday that information technology is belongings a public sale of bHome token, which is described every bit a Stable+ Coin that'south backed "dollar for dollar" past USDC, liens and loans on backdrop in the United states of america. Early participants in the auction will be eligible to receive boosted rewards via the Salary governance token.

Bacon Protocol works by giving homeowners the ability to substitution a lien on their property for a nonfungible token, or NFT, that represents a percentage of the belongings they purchased. The NFT gives buyers collateral to admission other crypto markets, including decentralized finance (DeFi). The unabridged process volition initially be facilitated by Virgin-backed LoanSnap, a fiscal services visitor that helps American homebuyers save on involvement rates and other associated costs.

The U.S. mortgage market is a complex ecosystem comprising banks, corporations, governments and borrowers. In 2022, the value of all U.S. residential mortgages was estimated to be worth $xi trillion.

Despite record-low interest rates, the market attracts large investors keen to collect involvement payments on mortgages and liens. It's estimated that banks, companies and governments purchase over $ii trillion worth of mortgages each yr. Meanwhile, the Federal Reserve has over $2.v trillion worth of mortgage-backed securities on its residue canvas every bit of Thursday.

Related: New Blockchain Lab aims to modernize the mortgage industry

While some mortgage providers have expressed interest in accepting cryptocurrency payments, the industry has largely fallen outside of DeFi'southward sphere of influence and so far. That could soon modify every bit new innovations continue to span the gap betwixt these 2 worlds.

The backers of Bacon Protocol, including Alex Drape of The Chainsmokers venture fund, believe blockchain engineering can bring mortgage investments to mainstream audiences. Currently, major banks earn billions of dollars in annual interest on their mortgage holdings.