YZi Labs Invests in Avalon Labs to Expand Bitcoin-Based Financial Infrastructure

• Avalon secures YZi Labs funding to expand Bitcoin-backed financial infrastructure.
• USDa stablecoin hits $500M TVL, ranking as second-largest CDP on DeFiLlama.
• Avalon pursues global regulatory licenses and institutional lending growth.

Avalon Labs has received investment from YZi Labs as part of a broader strategy to scale its Bitcoin-powered financial infrastructure. Avalon operates as an on-chain capital market built explicitly for Bitcoin, offering decentralized financial products including lending, stablecoins, and asset management tools. The capital raised will support Avalon’s efforts to secure regulatory approvals, expand institutional lending services, and prepare for the launch of a public investment fund.

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— YZi Labs (@yzilabs) May 26, 2025

However, as per the report, Avalon is currently one of the most active players in Bitcoin DeFi, with more than 20,000 Bitcoins under management and a user base exceeding 300,000. The project’s growth is grounded in its aim to convert Bitcoin from a passive store of value into a productive financial asset. This strategy includes offering products that integrate with traditional finance while maintaining Bitcoin’s decentralized structure.

USDa Stablecoin Ranks Among Top CDPs on DeFiLlama

Central to Avalon’s platform is its Bitcoin-backed stablecoin, USDa. Stablecoin enables users to access liquidity and earn yields without liquidating their Bitcoin holdings. According to DeFiLlama, USDa is currently the platform’s second-largest collateralized debt position (CDP), with over $500 million in total value locked (TVL).

USDa allows users to borrow stable assets by locking up their Bitcoin as collateral. This mechanism provides stability and liquidity while preserving the holder’s exposure to Bitcoin price movements.

Expansion Strategy Includes Legal Compliance Across Jurisdictions

Following the investment from YZi Labs, Avalon plans to begin formal regulatory procedures across multiple jurisdictions. The company works with leading legal partners to obtain necessary licenses and align its operations with existing financial regulations. This effort is intended to support launching a public fund and set the groundwork for establishing Avalon as a regulated Bitcoin financial institution.

Avalon’s plan also includes expanding its institutional lending business. With the foundation of an on-chain infrastructure and existing user base, the company aims to build the first compliant capital market around Bitcoin. The move is expected to attract new participants and provide alternative financial instruments backed by Bitcoin.

Supported by the MVB Program and Industry Stakeholders

Avalon participated in Season 8 of the Most Valuable Builder (MVB) incubation program, a joint initiative led by BNB Chain, YZi Labs, and CoinMarketCap. The program is intended to support blockchain startups with high-growth possibilities through access to infrastructure, mentorship, and exposure.

Alex Odagiu, Investment Director at YZi Labs, stated that Avalon’s integration Bitcoin into a scalable and compliant financial ecosystem aligned with the firm’s strategy. With the regulatory setup underway and institutional engagement on the rise, Avalon is positioning itself to play a key role in the evolution of Bitcoin finance.