Bybit integrates Avalon through CeFi to DeFi bridge for Bitcoin yield

Bybit partnered with Avalon Labs to offer Bitcoin yield to its users through Bybit Earn. Avalon's CeDeFi protocol allows users to earn yield by arbitraging institutional Bitcoin borrowing. Avalon secured over $2 billion in credit to facilitate this, offering institutional borrowers USDT liquidity at a fixed 8% rate. Avalon is exploring a Bitcoin-backed debt fund using Regulation A securities exemptions. The partnership utilizes Avalon's 1:1 Bitcoin-pegged token, FBTC, bridged to other blockchains. Avalon's platform uses FBTC as collateral, lending it at fixed rates and deploying borrowed USDT to high-yield strategies via Ethena Labs. This involves Ethena USD and sUSDE, with returns passed to Bybit Earn users. Avalon acts as a bridge between Bybit and Ethena's yield-generating protocol. Ethena recently raised $100 million and is developing products for regulated institutions. Bybit did not comment on the partnership.