Avalon Labs Unveils USDa: A Bitcoin-Backed Stablecoin Revolutionizing DeFi and CeFi
Avalon Labs, a trailblazer in blockchain and financial technology, has launched USDa [1], the world’s first Bitcoin-backed stablecoin, designed to transform Bitcoin into a dynamic financial asset. Built on LayerZero technology for cross-chain compatibility, USDa bridges decentralized finance (DeFi) and centralized finance (CeFi) ecosystems, offering Bitcoin holders unprecedented liquidity without the need to sell their holdings [2].
A New Era for Bitcoin Liquidity
USDa introduces a novel use case for Bitcoin, enabling holders to access liquidity through a stablecoin pegged 1:1 with USDT. Collateralized entirely by Bitcoin, USDa leverages Avalon’s innovative CeDeFi lending model, which combines the transparency and autonomy of DeFi with the security and efficiency of CeFi. This approach ensures stability, with the stablecoin’s supply dynamically scaled to Bitcoin collateral to mitigate de-pegging risks.
The stablecoin offers a fixed 8% borrowing rate, providing predictable capital flow for users seeking BTC-backed loans. Additionally, users can deposit USDa into Avalon’s vault to receive sUSDa, a yield-bearing version offering up to 15% annual percentage yield (APY). This high-yield opportunity positions USDa as a compelling alternative to traditional stablecoins like USDT and USDC, which often lack similar income-generating features.
Rapid Adoption and Market Impact
Since its launch, USDa has seen remarkable traction. The stablecoin has reached a supply of over 100 million, backed by $200 million in Bitcoin collateral, and achieved a total value locked (TVL) of $318 million. Avalon Labs has also opened a $50 million deposit quota, offering participants a floating APY ranging from 20% to 50% [4], alongside 3x points rewards, further driving adoption.
The company’s recent $10 million Series A funding round, led by Framework Ventures with contributions from UXTO Management, Presto Labs [3], and Kenetic Capital, underscores the market’s confidence in USDa’s potential. This capital will fuel the expansion of Avalon’s Bitcoin DeFi (BTCFi) ecosystem, which includes BTC-backed lending, yield-generating savings accounts, and a credit card.
Institutional-Grade Security and Scalability
Avalon Labs has partnered with leading custodians such as Cobo, Ceffu, and Coinbase Prime to ensure institutional-grade security and transparency. Publicly accessible custody addresses enhance trust for both institutional and retail users. Built on LayerZero’s [5] omnichain-compatible framework, USDa enables seamless integration across multiple blockchain networks, enhancing its usability and scalability.
A Vision for Bitcoin’s Future
“Avalon Labs is pioneering a Bitcoin-first financial ecosystem,” said a company spokesperson. “USDa transforms Bitcoin from a static store of value into a productive asset, unlocking its $1.3 trillion [6] market potential for global financial applications.”
The integration of USDa onto the Core blockchain, which combines Bitcoin’s proof-of-work security with Ethereum’s smart contract capabilities, further amplifies its reach. This move aligns with Avalon’s mission to simplify access to yield-bearing financial tools and drive Bitcoin’s adoption in decentralized finance.
Industry Recognition and Future Prospects
Avalon Labs’ innovation has not gone unnoticed. The company was recently named the winner of the second round of the Binance BNB Incubation Alliance, highlighting its leadership in the BTCFi space. With over $1.2 billion [7] in BTC-backed loans issued to date, Avalon is at the forefront of redefining Bitcoin’s role in global markets.