CZ’s YZi Labs Sparks $500M Avalon Ecosystem—Bitcoin DeFi Just Got Serious
Move over, legacy finance—Bitcoin’s DeFi ecosystem just got a half-billion-dollar adrenaline shot. YZi Labs, the brainchild of Binance founder Changpeng Zhao, is igniting Avalon, a new frontier for decentralized finance on Bitcoin’s bedrock.
No more ’wrapped assets’ or sidechain compromises. Avalon’s architecture reportedly bypasses Ethereum’s gas wars while cutting settlement times to near-instant. The $500M war chest? Call it a hedge against Wall Street’s next ’stablecoin’ debacle.
Proponents say it’s the missing link for institutional DeFi adoption. Skeptics whisper about Bitcoin maximalists finally capitulating to smart contracts. Either way—the game just changed.
USDa: Powering a Bitcoin-Backed Financial Ecosystem
At the Core of Avalon’s ecosystem is USDa, a Bitcoin-backed stablecoin that allows users to borrow, earn yield, and transact without selling their BTC.
The firm has over $500 million in total value locked (TVL). USDa is the second-largest collateralized debt position (CDP) project tracked by DeFiLlama.
The platform goes beyond stablecoins to include BTC-backed lending, yield-bearing savings accounts, and a Bitcoin-collateralized credit card, managing more than 20,000 BTC.
Scaling Toward Regulation and Institutional Growth
Avalon’s journey began in Season 8 of the Most Valuable Builder (MVB) accelerator—run in partnership with BNB Chain, CoinMarketCap, and YZi Labs.
In a blog post, the firm explains that with this new capital injection, Avalon is preparing to scale globally, targeting regulatory licenses across key markets and working with elite law firms to launch a fully regulated public fund.
At the same time, the company said it is ramping up its institutional lending business, seeking to become the world’s first fully regulated on-chain Bitcoin financial institution.
“Avalon leverages Bitcoin’s security and liquidity to create a full-stack financial ecosystem,” said Alex Odagiu, Investment Director at YZi Labs. “It bridges the gap between Bitcoin’s vast potential and real-world usability.”
“We’re building the premier financial hub for Bitcoin,” added Venus Li, Co-Founder of Avalon Labs. “With YZi Labs’ support, we’ll bring Bitcoin-backed products to everyday users and unlock yield for a global audience.”
Binance Labs Rebrands to YZi Labs With CZ Engaging More
In December, Binance Labs announced plans to rebrand in 2025. Changpeng Zhao (CZ) will lead and personally engage with investment projects. CZ served four months in prison for violating the U.S. Bank Secrecy Act and other regulatory issues.
Binance Labs broke away from the exchange Binance and became an independent entity in 2024. The rebranding reflects its evolving vision and distances itself from the exchange.
The investment arm said Binance founder CZ will dedicate more time to investing and directly engaging with projects. CZ is permanently banned from being involved in Binance leadership but is allowed to focus on investments.
