YZi Labs, a leading venture capital and investment firm managing over $10 billion in assets, has announced a strategic investment in Avalon Labs, a Bitcoin-focused on-chain capital markets platform. The announcement, made on May 26, 2025, triggered a significant surge in Avalon’s native token, AVL, which climbed to $0.27, nearing its intraday high of $0.29.

Funding to Strengthen Regulatory Compliance

According to YZi Labs, the new funding will be directed toward enhancing Avalon Labs’ regulatory compliance efforts. This aligns with Avalon’s broader mission to expand its Bitcoin-backed financial products to a global audience. The platform’s innovative use of Bitcoin aims to create a robust and integrated financial ecosystem, bridging the gap between Bitcoin’s potential and its usability in real-world economic applications.

“At YZi Labs, we support projects with strong fundamentals that can drive meaningful change and create long-term value,” said Alex Odaigu, Investment Director at YZi Labs. “Avalon stands out by utilizing Bitcoin’s security and liquidity to transform it into an active economic asset, opening up new opportunities in global markets.”

Growing Institutional Interest in Bitcoin-Backed Products

Avalon Labs’ focus on compliance comes at a time when the cryptocurrency market is experiencing rapid growth, driven in part by increasing participation from institutional investors. These institutions represent a key target audience for Avalon’s expanding suite of Bitcoin-backed solutions.

The platform offers several real-world financial products, including:

  • BTC-backed lending: Providing liquidity solutions to Bitcoin holders.
  • BTC-backed stablecoin (USDa): Offering an innovative way to unlock value without selling Bitcoin.
  • Yield-generating savings accounts: Allowing users to earn interest on their holdings.
  • Bitcoin-powered credit cards: Enabling convenient spending options for users.

Avalon has already attracted a substantial user base, with over 300,000 active users and more than 20,000 BTC currently serviced. This growth underscores the platform’s ability to deliver real value to Bitcoin holders and the broader crypto community.

Surpassing $500 Million in Total Value Locked

According to data from DeFiLlama, Avalon Labs’ total value locked (TVL) in its stablecoin, USDa, has exceeded $500 million, making it the second-largest collateralized debt position on the platform. USDa empowers Bitcoin holders to unlock liquidity and generate yield without the need to sell their BTC, providing a compelling alternative for long-term investors seeking to maximize their assets.

“USDa allows Bitcoin holders to tap into liquidity and yield opportunities without facing the pressure of selling, making it a game-changer for asset management,” said a spokesperson from Avalon Labs.

This milestone further cements Avalon’s position as a leader in the decentralized finance (DeFi) space, particularly in Bitcoin-backed products that cater to both retail and institutional users.

Looking Ahead

The partnership between YZi Labs and Avalon Labs highlights the growing interest in leveraging Bitcoin’s capabilities for innovative financial solutions. As the cryptocurrency market continues to evolve, platforms like Avalon are poised to play a critical role in shaping the future of decentralized finance by providing secure, compliant, and accessible products for a global audience.

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