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Avalon Labs and Bybit Launch Institutional Yield Layer, Transforming Bitcoin Lending for the CeFi Ecosystem
In a groundbreaking move, Avalon Labs and Bybit have announced the launch of an institutional yield layer on Bybit Earn, revolutionizing the way Bitcoin lending is approached in the centralized finance (CeFi) ecosystem. This innovative model combines the efficiency of traditional centralized finance with the innovation of decentralized finance (DeFi), enabling users to generate a fixed income from their digital assets.
The new system is built upon Avalon Labs’ fixed-rate institutional borrowing infrastructure and incorporates FunctionBTC ($FBTC), a version of Bitcoin fully compatible with DeFi protocols and pegged to Bitcoin. By utilizing this unique blend, Bitcoin can be transformed into an active yield-generating asset without exposing users to the complexities and volatility inherent in traditional DeFi lending platforms.
The key feature of this innovative system is its ability to bypass overleveraging and murky risk-taking often associated with certain DeFi lending platforms. This is achieved through the use of overcollateralized positions and the strategic allocation of capital into high-grade, yield-bearing assets only, ensuring that the yield mechanism remains intact.
Moreover, this partnership establishes a bridge between CeFi and DeFi, enabling users to access decentralized finance protocols while maintaining the security and transparency provided by Bybit Earn. The system’s simplicity allows users to stake their Bitcoin and earn Bitcoin yields without having to worry about asset risks or compromise on security.
The implications of this collaboration are far-reaching. As early as next month (March 2023), users will be able to stake their Bitcoin on BlockFi’s platform, earning a fixed income while maintaining the safety and integrity of their digital assets. This structure has the potential to pave the way for future CeFi-to-DeFi collaborations.
Avalon Labs’ institutional layer on Bybit Earn marks a significant milestone in the evolution of crypto finance. By integrating the best of both centralized and decentralized worlds, this partnership is yielding something truly remarkable for Bitcoin holders.
Source: https://nulltx.com/avalon-labs-and-bybit-launch-institutional-yield-layer-transforming-bitcoin-lending-for-the-cefi-ecosystem/
