CeDeFi · Review
ActiveAvalon CeDeFi Review 2026: Fixed-Rate Bitcoin Credit
Avalon CeDeFi is the institutional arm of Avalon Labs, offering Bitcoin-backed credit lines with custodian-held collateral. It holds roughly $103M in TVL on DefiLlama, but most claims come from the project's own site.
By the DappsAtlas editorial team · Updated
DappsAtlas score
6.8/10
Good
Our verdict on Avalon CeDeFi
6.8/10Avalon CeDeFi suits institutions that want a fixed-rate, Bitcoin-backed credit line without handing collateral to a smart contract. Its main strength is the 7% fixed rate with independent custody, backed by four named audit firms and roughly $103M in TVL. The main caveat is trust: usage figures are self-reported, custodians are unnamed, DefiLlama lists no audits for this entry, and fees beyond the headline rate are not published. Verify the terms before posting collateral.
Score breakdown
How Avalon CeDeFi scores
- Security
- 6.5/10
- Ease of use
- 6.5/10
- Fees
- 5.5/10
- Features
- 7.5/10
Scores run from 0 to 10 and are based only on facts we could verify. Where information was missing we mark the score n/a rather than guess.
What is Avalon CeDeFi?
Avalon CeDeFi is part of Avalon Labs, which describes itself as powering the Bitcoin on-chain capital market. DefiLlama files it under Anchor BTC, runs on Ethereum in its data, and shows about $102.8M in TVL, down 1.1% over seven days. It has been listed since September 2024.
The CeDeFi product is a Bitcoin-backed credit line for institutions at a 7% fixed annual rate. The collateral is held by independent, regulated custodians instead of in a smart contract. This mixes centralised custody and approval with on-chain infrastructure, which is the meaning of CeDeFi.
The homepage claims $3.1B+ in total capital loaned, 300,000+ users and 20,000+ BTC serviced. These are the project's own figures. Avalon also has an AVL token with a 1 billion supply cap, per its documentation, and a stablecoin called USDa.
This review is research-based and draws on the project's public materials and DefiLlama data.
How Avalon CeDeFi works
Avalon CeDeFi lets an institution post Bitcoin-linked collateral, such as BTC or FBTC, and borrow against it. The collateral stays with an independent custodian instead of being locked in a public smart contract. The borrower pays a flat 7% annual rate on a 6-month fixed-term loan, according to the homepage.
The loan is tracked by a loan-to-value ratio, which compares the debt with the collateral's value. If Bitcoin's price falls and the ratio rises too far, the position risks liquidation. Avalon says it uses proactive safeguards to act earlier, though the exact steps are not described publicly.
The wider Avalon system also includes on-chain isolated lending markets and the USDa stablecoin. Public reporting describes USDa as minted through a CeDeFi CDP, meaning a collateralised debt position, with FBTC as the collateral, or by depositing USDT.
7 features
Key features
01
Fixed-rate BTC credit
A 6-month fixed-term loan at a flat 7% annual rate, aimed at institutions that want predictable borrowing costs.
02
Independent custody
Collateral such as BTC or FBTC is held by regulated third-party custodians. Avalon states it has no direct access to client assets.
03
Liquidation safeguards
The homepage describes proactive safeguards intended to act before a position reaches liquidation. The specific mechanics are not detailed publicly.
04
On-chain lending markets
The same brand runs 50+ isolated Bitcoin markets across 20+ public chains, according to its own site.
05
Super Earn
A product marked Coming Soon with a 15% target APY for Bitcoin holders. The target is not a guaranteed return.
06
USDa stablecoin
Public reporting describes USDa as an omnichain stablecoin minted through a CeDeFi CDP by depositing collateral such as FBTC, or by depositing USDT.
07
Audits and monitoring
The homepage states that code was reviewed by four security firms and that protocol activity is monitored around the clock.
Pros and cons
What we like
- Fixed 7% annual rate on a 6-month term gives institutions predictable borrowing costs.
- Collateral is held by independent regulated custodians, which keeps it out of a single smart contract.
- The homepage names four audit firms (Salus, SlowMist, BlockSec, Nethermind) and says reports are public.
- About $103M in TVL on DefiLlama shows meaningful capital and a listing since 2024.
- Part of a broader Bitcoin lending ecosystem with on-chain markets and a stablecoin.
Watch out for
- DefiLlama lists zero audits for this specific CeDeFi entry, even though the homepage names four audit firms for the wider protocol.
- The CeDeFi product depends on third-party custodians and an off-chain approval process, which adds counterparty risk.
- Headline numbers such as $3.1B+ loaned and 300,000+ users are self-reported and cannot be checked.
- Super Earn is marked Coming Soon on the homepage, and its target APYs are not guaranteed returns.
- The CeDeFi credit line is aimed at institutions and requires an application, so retail access may be limited.
- The ecosystem spans several products, including USDa and the AVL token, which makes the overall risk picture harder to assess.
Avalon CeDeFi fees
The homepage advertises a flat 7% annual fixed borrow rate for the 6-month CeDeFi loan. Origination fees, custody costs, early-repayment terms and any liquidation penalties are not published.
On-chain markets show supply and borrow APYs in a live table, and those rates vary by market. Users should read the documentation and the application terms before committing collateral.
Is Avalon CeDeFi safe?
The homepage says four firms audited the code (Salus, SlowMist, BlockSec and Nethermind), with reports on GitHub, and that activity is monitored 24/7. DefiLlama shows no audits for this entry, so check which contracts each report covers.
CeDeFi carries counterparty risk. Collateral sits with third-party custodians, so users rely on those firms and on Avalon's off-chain processes. The project does not name the custodians or describe any regulatory licence held by Avalon. No incidents are mentioned publicly, but this does not mean none have occurred. Bitcoin price drops can still trigger liquidation despite the stated safeguards.
6 steps
How to get started with Avalon CeDeFi
- 1
Read the Avalon Labs documentation to understand the CeDeFi credit line, its LTV rules and the liquidation process.
- 2
Confirm that your organisation qualifies, since the product is aimed at institutions.
- 3
Submit the CeDeFi access application on the official site.
- 4
Review the custodian arrangement and check who holds your BTC or FBTC collateral.
- 5
Check the loan terms in writing, including the fixed rate, term length, fees and margin-call or liquidation triggers.
- 6
Start with a small position if the terms allow, and monitor your LTV regularly.
Who Avalon CeDeFi is for
Avalon CeDeFi is mainly for institutions, funds and large Bitcoin holders who want to borrow against BTC or FBTC at a fixed rate and accept custodian and counterparty risk. Retail users interested in Avalon would be looking at its separate on-chain markets or Super Earn instead.
Avalon CeDeFi FAQs
What is Avalon CeDeFi?
Avalon CeDeFi is a Bitcoin-backed lending product from Avalon Labs. Institutions apply for a fixed-rate credit line, and their BTC collateral stays with an independent custodian rather than in a smart contract.
What interest rate does Avalon CeDeFi charge?
The homepage advertises a flat 7% annual fixed borrow rate on a 6-month fixed-term loan for institutions. Other terms, such as LTV limits and any fees, are not given publicly, so check the documentation or the application process.
Who holds the collateral?
According to the homepage, institutional collateral is held by regulated third-party custodians, and Avalon says it has zero direct access to client assets. The custodians are not named publicly, so users should check who they are before applying.
Has Avalon been audited?
The homepage says four firms reviewed the protocol code: Salus, SlowMist, BlockSec and Nethermind, with reports published on GitHub. DefiLlama lists no audits for this particular entry, so verify which contracts each report covers.
Does Avalon have a token?
AVL is the Avalon token, and its documentation states a total supply capped at 1 billion. Its exact role in the CeDeFi product is not described publicly.
Can individuals use Avalon CeDeFi?
The CeDeFi credit line is positioned for institutions and needs an application. The wider Avalon ecosystem also has on-chain markets and Super Earn for general users, which are separate products with their own risks.
Compare
Avalon CeDeFi alternatives
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Same category
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Same chain
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Lido is a liquid staking protocol where users stake ETH and receive stETH, a reward-earning token usable across DeFi, governed by LDO holders.
Aave V3 is a non-custodial DeFi lending protocol on 21 chains where users earn interest on deposits or borrow against collateral.
Uniswap V4 is the latest Uniswap DEX version with hooks and concentrated liquidity, running on 22 chains for self-custody token swaps and liquidity provision.
Uniswap V3 is a non-custodial decentralized exchange protocol for token swaps and concentrated liquidity provision across 40+ chains.
DeFi Saver is a non-custodial tool for managing and automating leveraged lending positions across major DeFi protocols on Ethereum and layer-2 networks.
OKX is a major centralized crypto exchange for spot and derivatives trading, earn products and a Web3 wallet, with its own OKB token.
How we checked
Sources
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