Avalon Labs: New Crypto Lending Platform for Bitcoin

Avalon Labs Overview

Avalon Labs is a Lending/Borrowing project within the Bitcoin ecosystem, enabling users on Bitcoin Layer 2 networks like Babylon, Merlin, etc., to collateralize and borrow various types of assets. The goal of Avalon Labs is to become the primary liquidity provider for all Bitcoin Layer 2 networks and increase Bitcoin's use cases. Avalon Labs is also part of Binance Labs' MVB (Most Valuable Builder) Program, Season 8, which aims to promote the development of the BNB Chain ecosystem.

Avalon Labs Products

Currently, Avalon Labs has three main products focused on Lending/Borrowing:

1. Stablecoin USDa

USDa is a stablecoin issued by Avalon Labs across eight networks, including Ethereum, BNB Chain, Mantle, Base, Taiko, Zircuit, ZkSync, and Klaytn. Users can acquire USDa in two ways:

 + Exchange USDT for USDa: In the USDT/USDa pool at a 1:1 ratio.

 + Collateralize FBTC and borrow USDa: Borrowing up to 60% of the collateral value. For instance, by collateralizing 100 USD worth of FBTC, users can borrow up to 60 USDa.

USDa operates on a CDP (Collateralized Debt Position) mechanism, similar to DAI, with its value determined by the collateral assets, providing decentralization and transparency. However, the risk arises if the collateral (FBTC) decreases sharply or lacks growth momentum.

2. CeDeFi Lending

CeDeFi Lending combines traditional finance (CeFi) and decentralized finance (DeFi) for borrowing and lending stablecoins. The platform offers fixed interest rates from 8% to 10%, unlike variable rates seen in other Lending/Borrowing protocols. The stability is achieved by closely managing the collateral and loan values.

The platform also employs High-Frequency Trading (HFT) algorithms to execute large-scale, rapid transactions, minimizing slippage.

3. DeFi Lending

DeFi Lending allows users to borrow assets across multiple networks, from Bitcoin Layer 2 to Layer 1. Besides stablecoins, it supports various asset types, divided into three pools:

BTC LSD pool: Liquid staking tokens for BTC, such as pumpBTC, stBTC... Collateralizing BTC LSD allows borrowing only BTC LST tokens.

RWA Lending pool: Assets from the Real World Asset (RWA) category. Collateralizing RWA tokens enables borrowing only RWA assets.

General Pool: A pool that supports borrowing any type of asset, including LSD, RWA, and stablecoins.

AVAF Token Allocation

The token distribution for AVAF is as follows:

- Community Incentive: 40%

- Airdrop: 20%

- Team: 10%

- Ecosystem & Treasury: 10%

- Seed Round: 5.5%

- Initial Liquidity: 5%

- Advisor: 4.5%

- Private Round: 3%

- Public Round: 2%