- At a $25 million valuation, Avant Protocol has raised $6.5 million in its initial investment round.
- Avant is a crypto yield protocol based on Avalanche that provides a yield-bearing “stable-value” token that is comparable to the well-known Ethena.
Like Ethena Labs, Avant is a developer of crypto yield protocols, and has announced that it has raised $6.5 million in a seed fundraising round.
Superlayer, Avalaunch, GoGoPool, Daybreak Digital, and Linda Kreitzman participated in the round. Rhett Shipp, the founder of Avant, said that although these names are not well-known, the company prioritized its current network of contacts and angel investors over attracting well-known cryptocurrency venture capitalists.
Our team has been working in DeFi for a long time, and we valued speed and investment diversification over celebrity endorsements.
According to Shipp, Avant, which was established in June of this year, began having casual discussions with investors in May but formally started seeking money in October. According to Shipp, Avant’s post-money valuation reached $25 million after the transaction, which was structured as a simple agreement for future equity (SAFE), concluded earlier this month.
Avant: What is it?
SavUSD, a yield-bearing variant of avUSD, can be obtained by staking Avant’s stable-value coin, avUSD.
Users deposit stablecoins like Circle or Tether into Avant Protocol, which runs on the Avalanche blockchain, in order to manufacture avUSD. Although avUSD doesn’t provide yield on its own, it is intended for usage in a number of DeFi endeavors.
Staking avUSD earns savUSD, which is the yield. According to Avant’s website, savUSD now offers an annual percentage yield (APY) of 34%.
Avant has teamed up with 0xPartners, an on-chain asset management that employs delta-neutral trading techniques to provide profits for holders of savUSD. By acquiring an opposing futures position, delta hedging lowers the price risk of a spot investment.
According to its website, Ethena’s yield-bearing token, sUSDe, presently offers an APY of 25% and likewise uses delta hedging techniques. With about 313,000 subscribers, Ethena now has a total value locked (TVL) of approximately $4 billion.
With its “early access” mode, which only permits minting and staking of avUSD for a limited number of whitelisted addresses, Avant Protocol is still in its infancy. The next several weeks will see the expansion of that whitelist.
According to Shipp, Avant has less than ten depositors and its TVL is currently slightly over $5 million. As early access expands, he anticipates both numbers to rise.
Ethena against Avant
Shipp emphasized Avant’s more comprehensive approach to yield production when asked how it differs from Ethena.
Ethena’s USDe uses the “carry trade” to produce yield. In some market conditions, the carry trade yields a very high price, but in others, it yields a lower price. Avant also participates in the carry trade, but when it is less lucrative, it does other market-neutral deals. This has so far produced yields that are noticeably higher than those produced by Ethena. Furthermore, we think we can outperform our colleagues in the carry trade even when it is profitable.
Additionally, Shipp highlighted Avant’s dedication to decentralization. Avant operates entirely on-chain. We think that DeFi is the way of the future and that we are finally at a point where we can scale market-neutral tokens like this that generate yield without depending on centralized exchanges.
According to Shipp, Avant charges a performance fee on the yield produced, which starts at 10%. According to Shipp, the protocol also intends to introduce AVANT, a native governance token with a “vote escrow” mechanism, in the first quarter of 2025. Future token emissions will be within the governance rights of token holders.
Eight people make up Avant’s staff at the moment, and Shipp stated that no hiring plans are in the works.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
