Avant Launches DeFi-Native Stablecoin Pair on Avalanche

Avant Launches DeFi-Native Stablecoin Pair on Avalanche

Avant, a prominent decentralized finance (DeFi) platform, has launched its innovative stablecoin pair—AVUSD and SAVUSD—on the Avalanche blockchain. The tokens, introduced on Thursday, emerged after a five-month whitelisting period in which they generated double-digit yields, according to a release provided to Bitcoin.com.

This launch is part of a broader trend in DeFi-native stablecoins that exclusively use crypto assets as collateral, aiming to minimize dependence on traditional financial systems (tradfi). These stablecoins typically utilize advanced financial strategies, such as delta-neutral or delta hedging, to produce high yields, which appeal to sophisticated investors seeking better returns.

AVUSD and SAVUSD have distinct roles within the ecosystem. AVUSD serves as a stable store of value, while SAVUSD is a staked version that generates yield through delta hedging techniques.

Similar to Ethena's stablecoin, USDE, which launched last year and now stands as the third-largest stablecoin by market capitalization at nearly $6 billion, Avant hopes to replicate this success. Both stablecoins use crypto-native assets and delta hedging strategies to generate attractive yields, creating an appealing option for yield-seeking investors.

"We ensure both assets are fully backed, with funds placed in strategies across various blockchains," said Avant CEO Rhett Shipp. "We continuously monitor the markets and adjust fund allocations to optimize the on-chain yield we return to SAVUSD holders."

However, the design of sophisticated stablecoins hasn't been without risks. The collapse of the algorithmic stablecoin TerraUSD in 2022, which reached a market cap of $19 billion before failing spectacularly, highlighted the potential pitfalls of such financial structures.

In response to concerns about risk management, Shipp emphasized Avant’s precautions: "Our diversification strategy, insurance fund, and thorough due diligence on projects, alongside our secure Fireblocks setup managed by Hyperliquid, are all in place to ensure the safety of our funds."

Currently, Avant’s AVUSD offers an annual compounded yield of 24.04%, according to its website, making it an attractive option for DeFi investors looking for high-yield opportunities in a rapidly evolving crypto landscape.