bitcoinlfg

Tag: Bitcoinbacked

  • BTC staking platform Babylon teams up with Aave for Bitcoin-backed DeFi insurance

    BTC staking platform Babylon teams up with Aave for Bitcoin-backed DeFi insurance

    Babylon teams up with Aave for Bitcoin-backed DeFi insurance

    • Babylon and Aave partner to enable native BTC as collateral for DeFi lending.
    • BTC can now back decentralised insurance pools, earning yield if unused.
    • Users retain full control of their Bitcoin while accessing DeFi liquidity.

    In a groundbreaking move for the decentralised finance (DeFi) ecosystem, Bitcoin staking platform Babylon has announced a partnership with Aave, one of the largest decentralised lending protocols.

    The collaboration aims to allow Bitcoin (BTC) holders to use their native, unwrapped BTC as collateral for lending and to participate in a pioneering DeFi insurance model.

    This will reshape how Bitcoin interacts with DeFi, unlocking liquidity while maintaining the security that Bitcoin users expect.

    Native Bitcoin collateral comes to DeFi

    Traditionally, using Bitcoin in DeFi required wrapping it into a tokenised version such as WBTC, which introduced custodial risk and extra steps. Babylon’s partnership with Aave eliminates this barrier by enabling users to deposit their native BTC directly as collateral.

    Through Babylon’s trustless Bitcoin Vaults, BTC can be locked in a time-locked contract on its own blockchain and recognised by Aave’s hub-and-spoke lending architecture.

    This allows users to borrow stablecoins or other crypto assets while keeping full control of their Bitcoin keys.

    The move is expected to significantly expand BTC liquidity in DeFi. Currently, even the largest wrapped Bitcoin initiatives account for less than 1% of Bitcoin’s total market cap.

    Babylon’s own staking product secures over 56,000 BTC, demonstrating strong demand for productive uses of Bitcoin.

    By unlocking native BTC for lending, the partnership could bring a substantial portion of the dormant Bitcoin supply into productive DeFi applications, potentially transforming lending markets.

    DeFi insurance backed by Bitcoin

    Beyond lending, Babylon is preparing to extend its vaults into the insurance sector, a development that could redefine how DeFi protocols manage risk.

    The proposed model allows BTC holders to deposit their Bitcoin into decentralised insurance pools.

    These pools would serve as coverage against protocol hacks and other failures. Depositors earn yield if no claims occur, while the pool provides liquidity for payouts in the event of a validated exploit.

    This approach turns Bitcoin into a foundational asset for DeFi risk management, offering a new avenue for yield generation while safeguarding the ecosystem.

    Babylon co-founder David Tse told CoinDesk that the insurance initiative is still in development, with an official announcement expected in January 2026.

    Testing for the integrated BTC lending and insurance products is scheduled to begin in early 2026, with a broader rollout planned around April of the same year.

    The combination of Babylon’s secure vault design and Aave’s extensive liquidity network creates a framework that prioritises both safety and usability, a balance often missing in cross-chain and custodial solutions.

    Transforming Bitcoin’s role in DeFi

    This partnership addresses longstanding challenges in Bitcoin DeFi adoption.

    By removing the need for wrapped assets and custodial intermediaries, it reduces systemic risk while enabling Bitcoin holders to put their capital to work more efficiently.

    Users can participate in lending and insurance activities without relinquishing control of their Bitcoin, aligning with the core principles of security and decentralisation that have long defined the Bitcoin network.

    Experts in the space view this collaboration as a potential catalyst for broader adoption of BTC in decentralised applications.

    Unlocking even a small fraction of Bitcoin’s supply for lending and insurance could significantly deepen liquidity and reshape market dynamics.

    For the average user, it translates into safer, more streamlined, and more productive ways to generate yield from their holdings.

    Share this article
    Categories
    Tags

    Source link

  • Wintermute secures Bitcoin-backed credit line from Cantor Fitzgerald

    Wintermute secures Bitcoin-backed credit line from Cantor Fitzgerald

    Wintermute secures Bitcoin-backed credit line from Cantor Fitzgerald

    • Wintermute gets Bitcoin (BTC) credit line from Cantor Fitzgerald.
    • The credit line will enhance Wintermute’s capital-heavy OTC crypto trading operations.
    • The deal signals a cautious return of institutional crypto lending.

    Crypto market maker Wintermute has secured a Bitcoin-backed credit facility from Cantor Fitzgerald in a move that signals growing confidence in the revival of institutional crypto lending.

    The agreement is part of Cantor Fitzgerald’s newly launched $2 billion Bitcoin Financing Business, which seeks to provide secured credit lines to digital asset firms that play critical roles in market infrastructure.

    Wintermute, known for its role in digital asset market making and over-the-counter (OTC) crypto trading, did not disclose the exact size of the facility.

    However, its CEO, Evgeny Gaevoy, emphasised that the credit line is key to supporting the firm’s capital-intensive operations.

    The credit facility will enhance Wintermute’s OTC trading

    Wintermute’s operations demand significant capital due to the nature of OTC trading and digital asset settlement, where large volumes are traded across multiple exchanges in real time.

    Gaevoy noted that the facility will enhance the firm’s ability to hedge risk across trading venues, maintain uninterrupted market presence, and react quickly to volatile price shifts.

    He explained that this kind of financing helps the firm preserve liquidity while continuing to provide pricing and execution services for institutional clients around the clock.

    The arrangement marks a clear vote of confidence from Cantor Fitzgerald, a Wall Street powerhouse that has only recently begun expanding its reach into crypto.

    The broader context of the deal is a cautious yet unmistakable revival of institutional interest in crypto lending.

    Crypto finance firms and private banks are beginning to return to the lending space, but with stricter risk management and more established collateral practices.

    Notably, Blockstream recently raised billions to support its crypto lending funds, while Xapo Bank started offering Bitcoin-backed loans of up to $1 million as of March.

    According to Galaxy Research, the crypto lending market had surged to $36.5 billion by the end of 2024, more than double its Q3 2023 low, although still far from its 2021 peak of $64.4 billion.

    This recovery points to a maturing market where institutional participants are demanding higher levels of security and regulatory alignment.

    Cantor Signals comeback to crypto lending

    Launched in mid-2024, Cantor’s $2 billion Bitcoin Financing Business is positioning itself as a regulated alternative to the high-risk lending models that collapsed in recent years.

    This program has already extended support to Maple Finance and FalconX, with the latter planning to draw over $100 million from its facility, according to information from Bloomberg.

    Wintermute’s inclusion among the early recipients of Cantor’s credit lines places it in a select group of firms seen as strategically important to crypto markets.

    Unlike the largely unregulated and opaque structures that led to the fall of firms like Celsius Network and BlockFi in 2022, Cantor’s model emphasises secured and transparent lending.

    Wintermute is eyeing US growth with institutional backing

    Wintermute’s new credit facility is expected to strengthen its growing presence in the United States, where the regulatory environment has become more favourable for digital assets.

    With the introduction of spot Bitcoin ETFs and increased clarity around crypto trading rules, institutional activity in US markets is on the rise again.

    Gaevoy indicated that the company views this as an ideal time to expand its reach in North America, capitalising on renewed investor appetite and evolving regulatory frameworks.

    The partnership with Cantor Fitzgerald may also offer a credibility boost, especially as regulators and financial institutions look for trustworthy actors in the space.

    With the backing of a major Wall Street firm like Cantor Fitzgerald, Wintermute is now better positioned to navigate the volatility of crypto markets while providing critical infrastructure for trading and settlement.
    Share this article
    Categories
    Tags



    Source link

  • Avalon Labs evaluating a Bitcoin-backed public debt fund

    Avalon Labs evaluating a Bitcoin-backed public debt fund

    Avalon Labs evaluating a Bitcoin-backed public debt fund

    • Avalon Labs is planning to introduce a Bitcoin-backed public fund under SEC Regulation A.
    • Avalon Labs aims to bridge traditional finance and crypto, expanding Bitcoin’s utility.
    • Avalon’s AVL token has been listed on Bybit, boosting liquidity and community governance.

    Avalon Labs has decided to explore the uncharted territory of Bitcoin-backed lending products by leveraging SEC’s Regulation A framework.

    Barely a day after Avalon Labs announced the listing of its native token, AVL, on Bybit’s Spot trading platform, the company has announced it is considering launching a Bitcoin-backed public fund under the SEC Regulation A.

    The timing of this announcement coincides with a period of economic uncertainty, with rising inflation and evolving Federal Reserve policies influencing investor sentiment.

    By providing a structured entry point into Bitcoin investment for retail investors, Avalon might just lower the entry barriers for traditional investors, thereby expanding Bitcoin’s utility and acceptance.

    Expanding Bitcoin’s reach into traditional finance

    Avalon Labs’ move is seen as an attempt to open the door for massive adoption of Bitcoin-backed products, making them accessible not just to crypto enthusiasts but also to traditional investors. The initiative aims to position Bitcoin (BTC) not just as a store of value but as a dynamic financial instrument capable of generating yield through DeFi opportunities.

    By using Regulation A, often dubbed a “mini-IPO,” Avalon Labs seeks to bypass the complexities of a full SEC registration while ensuring compliance and transparency. This approach, commonly utilized by real estate investment trusts (REITs) and private funds, could provide a structured investment vehicle for retail investors, thus bridging the gap between traditional finance and the burgeoning crypto market.

    Avalon’s native token AVL debuted on Bybit on February 12

    Parallel to this financial exploration, Avalon Labs has also solidified its token ecosystem with the listing of AVL on Bybit. This move not only enhances liquidity but also introduces the token to a broader audience.

    AVL serves as the governance token, enabling community-driven decision-making, while USDa, the Bitcoin-backed stablecoin, offers a stable, bank-independent currency for on-chain transactions.

    The integration of AVL into Bybit’s platform, coupled with the potential launch of a public debt fund, underscores Avalon Labs’ strategic approach to expanding its footprint in the DeFi and traditional finance sectors.

    Share this article
    Categories
    Tags



    Source link