Bybit, a major cryptocurrency exchange, has integrated Avalon Labs’ CeDeFi protocol into its Bybit Earn platform, enabling users to earn Bitcoin (CRYPTO:BTC) yield through innovative lending and decentralised finance (DeFi) strategies.
The partnership, announced on April 14, bridges centralised finance (CeFi) with DeFi to offer fixed-rate institutional borrowing and high-yield opportunities.
Avalon Labs, known for its Bitcoin-backed financial solutions, allows institutional borrowers to access USDT (CRYPTO:USDT) liquidity without selling their Bitcoin holdings.
Borrowers pay a fixed 8% interest rate, while retail users benefit from stable returns generated through DeFi strategies.
The integration uses Avalon’s Bitcoin-pegged token, FBTC, which is bridged to Ethereum and other blockchains to facilitate these transactions.
Avalon Labs co-founder Venus Li has emphasised the platform’s regulatory compliance and innovation.
Earlier in February, Li hinted at plans for a Bitcoin-backed debt-focused public fund leveraging U.S. Regulation A exemptions.
“We have spent years researching how Regulation A has been applied in traditional finance and whether it could be a viable path for crypto companies,” Li stated.
The Bybit Earn platform now incorporates Avalon’s multi-protocol system.
Users deposit FBTC as collateral, which is then lent out at fixed rates.
The borrowed USDT is deployed into yield-generating strategies utilising Ethena Labs’ synthetic dollar protocols like USDe and sUSDe.
Returns are passed back to Bybit Earn users, making Bitcoin a productive asset while maintaining risk control.
Avalon’s CeDeFi approach combines the accessibility of DeFi with the regulatory oversight of CeFi, offering a balance between innovation and compliance.
This model is particularly advantageous as it aligns with evolving regulatory frameworks while providing secure capital flows.
The integration follows Avalon’s announcement in March of securing $2 billion in credit lines for scaling its lending operations.
Additionally, Ethena Labs recently raised $100 million to develop blockchain infrastructure and tokenised financial products.
At the time of reporting, the Bitcoin (BTC) price was $84,859.36.