BitVault Secures $2 Million Pre-Seed Funding for BTC-Backed Stablecoin Launch

BitVault, a decentralized finance (DeFi) protocol, has successfully closed a $2 million pre-seed funding round. The round was led by strategic investors including GSR, Gemini, Auros, and Keyrock. The funds will support the launch of bvUSD, an overcollateralized stablecoin backed by Bitcoin derivatives, and sbvUSD, a yield-bearing variant powered by institutional trading strategies from GSR.

BitVault aims to redefine Bitcoin’s role in stablecoin infrastructure by providing an institutionally-aligned alternative to fiat-pegged stablecoins. The protocol will serve as a core stablecoin protocol on Katana, a new DeFi-first chain incubated by Polygon Labs and GSR. Katana prioritizes deep liquidity and user rewards, leveraging a licensed fork of Liquity V2 to enable permissioned borrowing, user-set interest rates, and automated liquidation infrastructure.

Michael Kisselgof, Core Contributor of BitVault and VaultCraft, emphasized the protocol's mission to make Bitcoin usable in moments of fracture. He highlighted the strategic onboarding of GSR, Auros, and Keyrock, who will execute high-yielding, non-directional strategies to create demand and deep liquidity for BTC-backed money.

BitVault arrives at a time when there is rising demand for crypto-native stability in a fragmented global monetary environment. Unlike fiat-backed stablecoins or algorithmic options, bvUSD is collateralized by BTC derivatives. Only whitelisted institutional borrowers can mint bvUSD in bulk, while anyone can mint bvUSD using stablecoins, mitigating risks associated with overleveraged or anonymous borrowing. DeFi users can earn yield by staking bvUSD into sbvUSD, which leverages delta-neutral and arbitrage strategies managed by GSR.

Alain Kunz, Director from GSR, expressed excitement about the growing interest in BTC-backed stablecoins designed to integrate seamlessly into DeFi ecosystems. He noted that BitVault’s approach, with experience in institutional-grade yield strategies, positions it well for success. The deployment on Katana, a DeFi-centric chain incubated by GSR, adds a new layer of stablecoin utility, enabling BTC to take on a more productive role within Katana’s high-yield DeFi stack.

BitVault is a friendly fork of Liquity V2, re-engineered for institutional use under a licensed deployment agreement with Liquity AG. The protocol blends automated, governance-free mechanisms with a permissioned borrowing layer, offering stability while retaining core DeFi primitives like direct redemption and composable yield strategies. Its upcoming VCRAFT token will govern future protocol parameters and serve as a rewards mechanism for stability providers and liquidity contributors.

The launch on Katana positions BitVault at the heart of an emerging liquidity and settlement network across the EVM chain. Initial integrations include Vault infrastructure, Morpho money markets, Sushi AMMs, and a multichain “Bits” points campaign tied to VCRAFT distribution. BitVault is scheduled for mainnet deployment on Katana in June 2025, with broader integrations across DeFi ecosystems and centralized liquidity venues in the works. The team plans to expand its stablecoin suite to support additional BTC-based collateral assets and is actively onboarding institutional borrowers.

BitVault is a DeFi protocol that offers a crypto-native solution for money through its BTC-backed stablecoin, bvUSD, and a yield-bearing staked stablecoin, sbvUSD. The protocol is designed to provide an institutional-grade, capital-efficient stablecoin with user-set interest rates, multi-collateral backing, and enhanced liquidity mechanisms.