Avalon Finance

Avalon Finance is a Bitcoin-centric financial platform that combines decentralized finance (DeFi) and centralized finance (CeFi) elements to provide lending solutions and stablecoin services. The platform aims to bridge traditional financial systems with blockchain technology, focusing primarily on Bitcoin-backed financial products. ^[1]

Overview

Avalon Labs aims to create an on-chain financial center focused on Bitcoin, bridging decentralized finance (DeFi) with traditional financial services. The platform offers various solutions, such as Bitcoin-backed lending, a Bitcoin-backed stablecoin, yield-generating accounts, and a credit card, designed to enable Bitcoin holders to utilize their assets in a dynamic financial ecosystem.

Avalon Labs is built around four main components: CeDeFi CDP USDa, a yield-bearing collateralized debt position (CDP) backed by BTC that allows stablecoin generation while earning yield; USDaLend, a lending protocol using Bitcoin-backed stablecoins; CeDeFi Lending, a hybrid protocol connecting DeFi with CeFi liquidity providers to enhance scalability and liquidity; and Decentralized Lending, which features an isolation pool mechanism for secure lending with Bitcoin Liquid Staking Derivatives (LSDFi). ^[2]

Products

CeDeFi CDP USDa

USDa is a Bitcoin-backed collateralized debt position (CDP) stablecoin that offers unique features for Bitcoin holders and DeFi users. It introduces a fixed borrowing rate system for predictable capital costs, allowing for better financial planning, and provides a stable 1:1 conversion to USDT, offering protection against volatility. USDa's supply is unlimited, ensuring continuous scalability, and it is omnichain compatible through LayerZero, enabling interaction across multiple blockchains. Additionally, users can stake USDa to earn sustainable yield, with the platform ensuring high capital efficiency and liquidity. ^[3] ^[4] ^[5]

CeDeFi Lending

Avalon's CeDeFi lending protocol combines centralized and decentralized finance elements to offer a stablecoin borrowing platform for retail and institutional users. It features fixed borrowing rates for stablecoins like USDT and USDC, real-time on-chain transparency, and minimized slippage during liquidations through a proprietary trading algorithm. The protocol integrates with DeFi platforms and leverages institutional capital to maintain liquidity and reduce borrowing costs. This approach enables predictable lending conditions and supports a more accessible and efficient financial infrastructure. ^[6]

DeFi Lending

Avalon's DeFi lending protocol supports borrowing and lending for Bitcoin and Bitcoin Liquid Staked Derivatives (LSDs), using isolated lending pools to enhance capital efficiency and reduce risk exposure. The platform provides deep liquidity and over $1 billion in assets and operates across multiple blockchains, including Ethereum, Arbitrum, and BNB Chain, enabling access to a broad range of users and ecosystems. ^[7]

Isolated Lending Pools

Avalon’s isolated lending pools enhance capital efficiency and reduce risk by separating asset classes into pools with customized parameters. The BTC LSD Pool handles individual BTC Liquid Staked Derivatives alongside BTC, adjusting risk settings based on asset volatility. The RWA Lending Pool is dedicated to stable, yield-bearing Real World Asset tokens paired with stablecoins. The General Pool supports a variety of mainstream assets like BTC, ETH, and stablecoins, offering broad lending opportunities. Each pool is managed with asset-specific Loan-to-Value and liquidation thresholds to maintain stability and minimize exposure. ^[8]

AVL

AVL is Avalon’s governance token, introduced to give the community a direct role in shaping its Bitcoin-backed financial ecosystem. Holders of staked AVL (sAVL) can vote on major protocol decisions, influencing the platform’s development and strategy. Beyond governance, AVL unlocks benefits like fee rebates, access to AVL Lend, and exclusive incentives. With 90% of the token supply allocated to the community and just 10% to the team, AVL reinforces Avalon’s commitment to a decentralized, user-driven model. ^[9] ^[10]

Tokenomics

AVL has a total supply of 1B tokens and has the following distribution: ^[11]

Community Incentive: 28%
Airdrop: 20%
Investors: 19%
Ecosystem & Treasury: 15%
Team: 10%
Advisor: 4%
Initial Liquidity: 4%

sAVL

sAVL is the staked form of AVL, designed to reward long-term participation and deepen alignment between users and Avalon Labs. Staking AVL into sAVL enables holders to earn AVL rewards, access governance rights, and influence the allocation of token emissions across various pools. A bribing market supports additional yield generation for sAVL holders. Users also receive fee rebates on Avalon products like USDa and CeDeFi Lending, with benefits increasing based on the amount staked. sAVL reinforces long-term engagement by tying incentives to Avalon’s sustained growth. ^[12]