Furthermore, Bybit has collaborated with Avalon Labs to add their CeFi to DeFi bridge. Now, you can experience groundbreaking new methods of earning yield on your Bitcoin assets! Now, Bybit users can take advantage of the yield-earning potential through Ethena Labs’ protocol. Avalon Labs is here to be the matchmaker that makes that collaboration happen. Avalon Labs, a centralized decentralized finance (CeDeFi) protocol, is now part of Bybit’s new yield product, Bybit Earn.
Bridging CeFi and DeFi with Bitcoin Yield
Avalon describes its product as a “CeFi to DeFi” bridge, enabling institutional borrowers to tap USDt liquidity in a decentralized manner. These borrowers would be able to access liquidity through the fixed 8% borrowing cost without having to do a fire sale liquidation of their Bitcoin collateral. Powered by Ethena Labs ETHA Protocol, the platform implements high-yield strategies through their synthetic dollar protocol. This allows users to get yield from BTC by capitalizing on arbitrage opportunities in its institutional borrowing layer’s fixed-rate tier.
Avalon Labs accepts FBTC, a 1:1 Bitcoin-pegged token developed by DeFi protocol Mantle and Bitcoin-centric crypto developer Antalpha Prime, as collateral and lends it at fixed rates. This opens up a new mechanism where users can earn yield on their BTC without having to sell them. In March, Avalon Labs raised a minimum of $2 billion in credit. This breathtaking milestone is a testament to the market’s robust confidence in its platform.
Expansion and Regulatory Considerations
Avalon Labs has plans to issue a new debt-focused public fund backed by Bitcoin. Avalon Labs’ co-founder, Venus Li, considers this fund could actually be issued via a Regulation A US securities exception. She views this as a key strategic opening.
Combined with Avalon Labs’ product, this creates a plethora of benefits for fulfilling regulatory requirements associated with integrating and working alongside CeFi platforms. This is thanks to the newfound visibility into, and control over, capital flows and access that the platform unlocks.
Enhanced Control and Access
Avalon Labs’ platform gives users more control over where capital flows and who gets access. This feature alone is enough to make it extremely attractive to institutional borrowers as well as Bybit users who want to earn yield on their Bitcoin assets. Avalon Labs bridges CeFi and DeFi. This bridge unlocks access to liquidity and yield-generating opportunities that have previously been out of reach.
