Avalon Labs, a company specializing in Bitcoin decentralized finance (DeFi), has successfully closed a Series A funding round, raising $10 million. The funding round was led by Framework Ventures, with contributions from UTXO Management, Presto Labs, and Kenetic Capital. This funding is a significant milestone for Avalon Labs as it aims to expand its Bitcoin-backed stablecoin USDa and its larger DeFi ecosystem.
USDa, with a fixed borrowing rate of 8%, allows consumers to use their Bitcoin holdings as collateral, providing a unique alternative in the growing DeFi sector. The total value locked (TVL) of USDa is currently $700 million, making it the second-largest collateralized debt position (CDP) initiative worldwide, following MakerDAO’s DAI.
The increasing TVL of USDa highlights the rising demand for financial solutions backed by Bitcoin, as it serves as a bridge between the store of value that Bitcoin represents and its potential as a robust financial instrument. Avalon Labs achieved a TVL of over $1 billion in November 2024, further demonstrating its significant growth trajectory.
To achieve its goal of integrating Bitcoin into the larger financial system, Avalon Labs heavily relies on funding. The company aims to cater to both retail and institutional players by connecting decentralized finance with centralized decentralized finance (CeDeFi), thus increasing the value of Bitcoin beyond its current applications.
Avalon Labs also seeks to expand its user presence in the market by offering competitive returns. Previously, it was reported that the USDa stablecoin had a supply of 100 million, fully backed by $200 million worth of Bitcoin reserves. In addition to quadruple rewards points for members, Avalon Labs has introduced a $50 million deposit quota with attractive annual percentage yields (APY) ranging from 20% to 50%.