Bybit:- In a bold move to bridge the gap between centralized finance (CeFi) and decentralized finance (DeFi), Bybit, one of the leading cryptocurrency exchanges, has integrated Avalon Lab’s BTC lending protocol into its platform.
This strategic partnership will allow users to access high-yield Bitcoin lending by providing an innovative approach to earning passive income in the crypto space.
Avalon Labs claims to be the first fixed-borrow rate lending model in crypto.
Unlike traditional crypto lending platforms that usually offer variable interest rates based on market conditions, Avalon introduces a fixed borrowing rate model — starting at 8% for Bitcoin. This brings predictability and stability to borrowers and lenders in the crypto space.
The CeFi-DeFi Bridge: A New Era in Cryptocurrency Lending?
This integration aims to combine the best features of both worlds: the security and reliability of CeFi and the flexibility and high-yield opportunities presented by DeFi.
Bybit users via Bybit Earn can now leverage Avalon’s CeFi-to-DeFi bridge to lend Bitcoin at a fixed rate. This will be made possible by the protocol’s use of FBTC tokens. Avalon’s platform ensures that these loans are managed in a manner that maximizes returns while maintaining security.
Avalon Labs’ institutional layer is now live on @Bybit_Official Earn, redefining how Bitcoin lending and yield work within the centralized exchange ecosystem.
By integrating with Bybit Earn, Avalon unlocks new yield opportunities for Bitcoin holders by arbitraging our fixed-rate… pic.twitter.com/bX4DWZVyA5
— Avalon Labs (@avalonfinance_) April 14, 2025
By integrating Avalon’s lending protocol, Bybit aims to offer users a hybrid model — using Avalon’s CeFi features while tapping into the efficiency and yield-generation possibilities of DeFi.
Notably, BlockFi, Nexo, and others have offered fixed or semi-fixed interest rates, but they’re centralized custodians, not on-chain, and typically don’t blend DeFi strategies or offer full transparency.
DeFi platforms like Aave or Compound usually offer variable rates, though some protocols like Notional and Yield Protocol do support fixed rates — but these are often complex for average users and don’t focus on institutional-grade simplicity or a BTC-focused model like Avalon.
What Does This Mean for Users?
Bybit’s partnership with Avalon brings several significant benefits to users of the platform.
First and foremost, the yield-generating opportunities for Bitcoin holders have increased dramatically. Bybit’s collaboration with Avalon allows users to earn a fixed 8% yield on Bitcoin by borrowing, which is facilitated by Avalon’s institutional-grade lending system.
Additionally, this collaboration offers enhanced security and simplified access to high-yield strategies, without requiring users to deeply engage with the complexities of DeFi protocols themselves.
The protocol leverages Avalon’s experience in CeFi and its ability to minimize risks associated with liquidity, allowing users to safely benefit from decentralized finance’s rewards.
The Role of FBTC Tokens
At the heart of this integration is the use of FBTC tokens, which play a crucial role in how the yield is generated.
These tokenized Bitcoin represent the value of Bitcoin in a form that can be utilized within Avalon’s DeFi ecosystem to generate higher returns.
By bridging these two financial systems, Bybit is effectively lowering the entry barrier for users who want to participate in decentralized finance without needing to understand the underlying protocols.
Users can access the yield generation system directly through the Bybit Earn platform, which simplifies the process of earning passive income from Bitcoin holdings.
Moreover, this partnership highlights how centralized exchanges are beginning to embrace decentralized finance. This is ultimately providing a comprehensive and integrated solution for users looking for high-yield opportunities, secure transactions, and the convenience of centralized services.
Will This Model Become the Future of Finance?
The integration of Avalon’s BTC lending protocol by Bybit raises a larger question: Are CeFi and DeFi truly bridging the gap in the world of cryptocurrency?
By combining the strengths of both systems, this partnership may serve as a stepping stone for further innovations in the crypto ecosystem. Bybit’s new model could set a precedent for other exchanges and platforms to follow suit, paving the way for more user-friendly access to DeFi opportunities.
For now, Bybit users can enjoy the best of both worlds, with access to secure, yield-generating Bitcoin lending strategies that were once only available through more complex decentralized platforms.
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