KEY TAKEAWAYS
- Avalon Labs launches its Universal Lending App on ZetaChain, enhancing DeFi with native Bitcoin support and cross-chain interactions.
- ZetaChain’s Universal Blockchain aims to make cryptocurrencies as interconnected as the internet, facilitating seamless asset lending and borrowing across blockchains.
- The collaboration introduces the first Universal App for native cross-chain lending, allowing users to deposit and borrow assets across different chains without centralized custodians.
- ZetaChain’s decentralized approach unlocks Bitcoin liquidity in DeFi, enabling advanced use cases like BTC-backed stablecoins and staking.
Avalon Labs, a prominent lending protocol with over $1 billion in total value locked (TVL), has launched its Universal Lending App on ZetaChain. This development marks a significant step in decentralized finance (DeFi) by introducing native Bitcoin (BTC) support and facilitating seamless cross-chain interactions. The announcement was made here.
ZetaChain aims to create a Universal Blockchain that provides native access to various blockchains, making cryptocurrency as accessible and interconnected as the internet. Avalon Labs’ integration into the ZetaChain ecosystem is a pivotal move towards achieving this goal. The Universal Lending App allows users to lend and borrow a variety of assets, including BTC, ZETA, ETH, and stablecoins, across different blockchain networks without the need for wrapped assets or centralized custodians.
Cross-Chain Lending and DeFi Opportunities
The collaboration between Avalon Labs and ZetaChain introduces the first Universal App for native cross-chain lending. Built on ZetaChain’s Universal EVM, these apps can natively connect to any blockchain, including EVM and non-EVM chains, Bitcoin, and layer 2 solutions. This capability enables users to deposit native assets on one chain and borrow on another, streamlining the process and enhancing user experience.
For instance, users can deposit native BTC as collateral on ZetaChain and borrow USDC directly into their Ethereum wallet. The decentralized intermediaries, ZetaChain and the PumpBTC protocol, ensure security and allow users to settle back to native Bitcoin at any time. This approach not only simplifies the lending process but also maximizes capital efficiency through automated multi-step workflows managed via ZetaChain’s Gateway.
Unlocking Bitcoin Liquidity in DeFi
Bitcoin, the largest cryptocurrency by market cap, has historically seen limited utilization in DeFi due to liquidity constraints. ZetaChain’s Universal Apps aim to unlock Bitcoin’s potential by enabling advanced use cases such as native cross-chain lending, BTC-backed stablecoins, and staking. Unlike solutions that rely on centralized custodians, ZetaChain’s EVM-compatible smart contracts are fully decentralized and interoperable with Bitcoin and other connected chains.
This decentralized approach enhances trust and reduces the complexity for developers managing cross-chain contract deployments. It provides instant, native access to users and liquidity across multiple chains, paving the way for more innovative DeFi strategies and applications.
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