Key Notes
- Avalon Labs has raised $10 million in a Series A funding round to expand the adoption of its Bitcoin-backed stablecoin, USDa, and strengthen its decentralized finance offerings.
- Unlike Ripple’s fiat-backed RLUSD, Avalon’s USDa is collateralized by Bitcoin, offering a decentralized alternative in the stablecoin market.
Avalon Labs, a blockchain company focused on transforming Bitcoin into a more dynamic financial tool, has raised $10 million in a Series A funding round.
According to a CoinDesk report on Monday, the funding was led by Framework Ventures with participation from investors such as UTXO Management and Kenetic Capital. The company aims to use the money to bolster the adoption of its flagship Bitcoin-backed stablecoin, USDa, and expand its decentralized finance (DeFi) offerings.
Revolutionizing Bitcoin’s Use Case
Avalon Labs seeks to redefine Bitcoin’s utility by turning it from a static store of value into a versatile financial asset. The company’s stablecoin, USDa, allows users to collateralize their Bitcoin holdings to mint stablecoins at a fixed borrowing rate of 8%. This innovative approach enables Bitcoin holders to access liquidity while retaining their exposure to Bitcoin’s potential price appreciation.
Since its launch in November 2024, USDa has gained traction in the DeFi sector, recently surpassing $700 million in total value locked (TVL). The stablecoin, described as the “Bitcoin Money” became the second largest collateralized debt position project in the world, with a total market size of $84.10 million in December.
In addition to USDa, Avalon offers complementary financial products, including Bitcoin-backed lending services, yield-generating savings accounts, and a credit card, further enhancing its ecosystem.
A Thriving Stablecoin Market
Meanwhile, the latest funding round comes at a time when the stablecoin market continues to expand, with new players entering the space and offering diverse solutions.
Earlier this month, Ripple, a leading blockchain payment infrastructure provider, debuted its fiat-backed stablecoin, RLUSD, which is supported by cash reserves, government bonds, and cash equivalents.
Coinspeaker previously reported that the stablecoin aims to provide stability for users while maintaining liquidity across various exchanges, including Bitso and Uphold. The company said it partnered with corporate institutions across the United States, the United Kingdom, the United Arab Emirates (UAE) and Asia to democratize access to the stablecoin for a broader range of users.
With Ripple’s stablecoin already in the market, other crypto companies like BitGo have announced plans to launch their own native stablecoins. BitGo plans to release USDS in 2025, differentiating itself by becoming the first to issue an “open-participation stablecoin,” according to Coinspeaker.
The stablecoin market has also seen the likes of PayPal, a global payment firm, establish a significant presence within the sector. The US-based payment giant launched its own native stablecoin PayPal USD (PYUSD) in 2023.
Meanwhile, Avalon’s USDa differentiates itself by using Bitcoin as collateral, offering a decentralized alternative to the fiat-backed stablecoins from Ripple, PayPal, and BitGo.
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Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.
