In a bold move towards the future of decentralized finance (DeFi) with Bitcoin, YZi Labs, backed by Changpeng Zhao (CZ), has made a strategic investment in Avalon Labs. Formerly known as Binance Labs, YZi Labs is showing a strong interest in the potential of Bitcoin-powered DeFi by supporting platforms like Avalon Labs.
Avalon Labs is focused on building on-chain capital markets powered by Bitcoin. The project is developing financial infrastructure around BTC-collateralized lending, a stablecoin called USDa, savings products, and credit services. This investment underscores the growing importance of Bitcoin in the DeFi space.
At the heart of Avalon’s ecosystem is USDa, a stablecoin backed by Bitcoin. This innovative approach allows users to borrow, earn yield, and transact without having to sell their BTC holdings. With over $500 million in total value locked (TVL), USDa is the second-largest collateralized debt position (CDP) project according to DeFiLlama.
Avalon’s platform offers more than just stablecoins. It includes BTC-backed lending, yield-bearing savings accounts, and even a Bitcoin-collateralized credit card. The platform manages over 20,000 BTC, demonstrating its significant presence in the DeFi space.
The journey for Avalon began in Season 8 of the Most Valuable Builder (MVB) accelerator, in partnership with BNB Chain, CoinMarketCap, and YZi Labs. With this new investment, Avalon is gearing up to expand globally. They are aiming to secure regulatory licenses in key markets and are working with top law firms to launch a fully regulated public fund.
Additionally, Avalon is focusing on scaling its institutional lending business. The goal is to become the world’s first fully regulated on-chain Bitcoin financial institution. By leveraging Bitcoin’s security and liquidity, Avalon aims to create a comprehensive financial ecosystem that bridges the gap between Bitcoin’s potential and real-world usability.
The rebranding of Binance Labs to YZi Labs in 2025 reflects a new chapter for the investment arm. Changpeng Zhao (CZ) will lead and personally engage with investment projects, showcasing a renewed focus on investments. Despite regulatory challenges, CZ remains committed to supporting innovative projects in the crypto space.
Overall, YZi Labs’ investment in Avalon Labs is a significant step towards advancing Bitcoin-powered DeFi. With a focus on regulatory compliance and institutional growth, Avalon is poised to become a key player in the evolving landscape of decentralized finance.