YZi Labs Invests in Avalon Labs for Bitcoin DeFi Expansion

YZi Labs, the investment arm formerly known as Binance Labs, has made a significant move in the Bitcoin DeFi space by investing in Avalon Labs. This investment underscores the growing interest in Bitcoin-powered decentralized finance (DeFi) solutions. Avalon Labs is developing an on-chain capital market infrastructure that leverages Bitcoin, focusing on areas such as BTC-collateralized lending, stablecoin USDa, savings products, and credit services.

Avalon’s ecosystem is centered around USDa, a Bitcoin-backed stablecoin that enables users to borrow, earn yield, and transact without liquidating their BTC holdings. The platform has amassed over $500 million in total value locked (TVL), making it the second-largest collateralized debt position (CDP) project tracked by DeFiLlama. Beyond stablecoins, Avalon offers BTC-backed lending, yield-bearing savings accounts, and a Bitcoin-collateralized credit card, managing more than 20,000 BTC.

Avalon’s journey began during Season 8 of the Most Valuable Builder (MVB) accelerator, a program run in partnership with BNB Chain, CoinMarketCap, and YZi Labs. With the new capital injection, Avalon is poised to scale globally, targeting regulatory licenses in key markets and collaborating with top law firms to launch a fully regulated public fund. The company is also expanding its institutional lending business, aiming to become the world’s first fully regulated on-chain Bitcoin financial institution.

Alex Odagiu, Investment Director at YZi Labs, highlighted Avalon’s potential, stating, “Avalon leverages Bitcoin’s security and liquidity to create a full-stack financial ecosystem. It bridges the gap between Bitcoin’s vast potential and real-world usability.” Venus Li, Co-Founder of Avalon Labs, added, “We’re building the premier financial hub for Bitcoin. With YZi Labs’ support, we’ll bring Bitcoin-backed products to everyday users and unlock yield for a global audience.”

In December, Binance Labs announced plans to rebrand as YZi Labs by 2025, with Changpeng Zhao (CZ) leading the investment arm and personally engaging with projects. CZ, who served four months in prison for regulatory issues, will dedicate more time to investing and directly engaging with projects. The rebranding reflects YZi Labs’ evolving vision and its independence from the exchange Binance. Despite being permanently banned from Binance leadership, CZ is allowed to focus on investments, further solidifying YZi Labs’ commitment to the DeFi space.