Avalon Labs has partnered with Bybit to introduce a new Bitcoin-based fixed-income product, marking a significant step in integrating CeFi with DeFi. This partnership introduces a new fixed-rate Bitcoin lending tool to Bybit’s Earn platform. Now they can earn yield on their BTC with a known and managed risk return profile. With this integration, Bybit users can borrow fixed-rate loans USDT by collateralizing their $FBTC. This has created new possibilities for earning yield on their BTC assets. Now, since DeFi strategies have been generating returns, those profits are recycling back to Bybit. Bybit then allocates the profit to Earn users based on their Bitcoin deposits.
Fixed-Rate Lending Model
By using a fixed-rate borrowing model, Avalon Labs distinguishes itself from other traditional lending platforms with variable returns. This model allows for predictable returns, making it an attractive option for users seeking stability in the volatile crypto market. The platform leverages $FBTC, a wrapped version of Bitcoin designed to maintain a 1:1 peg to BTC, as collateral. This means that Bitcoin can produce lofty yields through DeFi methods. This sort of middle-ground approach serves to connect centralized finance (CeFi) with the burgeoning world of decentralized finance (DeFi).
Bybit’s Earn interface makes it easy and user-friendly for anyone to deposit BTC, which is instantly converted into $FBTC. This seamless integration empowers users to unlock advanced DeFi strategies. They can do this without having to directly steer through the complicated DeFi landscape. Second, the fixed-rate lending model gives users certainty about what kind of returns they can expect. Parallel-Track Clarity This new clarity increases transparency and cultivates trust in the process.
The Role of $FBTC
Backed by Mantle and Antalpha Prime, $FBTC also serves as a Bitcoin-compatible asset across multiple blockchain ecosystems – including Ethereum. As the third largest DeFi asset measured by total value locked (TVL) with over $1.25 billion, $FBTC is the DeFi king. Its design as a wrapped Bitcoin ensures that it maintains a 1:1 peg to BTC, providing stability and reliability for users.
The ability to use $FBTC as collateral on Bybit’s platform makes creating fixed-rate loans in USDT possible. This mechanism is what enables Bitcoin to earn consistently high returns through various DeFi strategies. It increases the functionality of Bitcoin, going beyond its historical function as a store of value. With $FBTC now fully integrated into the Bybit ecosystem, its important role is further underscored. In doing so, it serves as a robust bridge connecting Bitcoin to the broader DeFi ecosystem.
Expert Insights
Liam is a DeFi Analyst & Writer, with a strong academic and practical background in financial markets and emerging technology. His focus area is decentralized finance (DeFi). It’s no wonder that Liam’s clear explanations of the crisis have made him the go-to source of information within the community. Avalon Labs is at the forefront of a new wave of crypto finance. They are taking Bitcoin’s hard-won stability and combining it with both high-yield opportunities found within DeFi.
His perspectives exemplify the exciting cutting-edge approach that Avalon Labs is taking. They’re successfully combining the stability of Bitcoin with the high-yield potential of DeFi. Analysts such as Liam help to demystify sophisticated financial instruments. They contribute to creating a culture of trust and adoption within the crypto community.
