Bitcoin-backed stablecoin USDa has made significant strides, emerging as the second-largest collateralized debt position (CDP) project globally, with a total market size of $84.10 million. Avalon Labs reveals that this comprises $68.10 million in supplied assets and $20.85 million in borrowed assets. Launched on November 11 and operating on LayerZero’s cross-chain technology, USDa is the first overcollateralized stablecoin pegged to Bitcoin, dubbed the ‘Bitcoin Money’ for its use of BTC as collateral and ability to offer institutional liquidity in both permissioned and permissionless settings, integrating with DeFi and CeFi ecosystems.
DefiLlama data shows USDa, issued by Avalon Labs, trailing only MakerDAO’s DAI in the CDP space. Its total value locked (TVL) has surpassed $700 million, with $483 million in BNB Chain, Ethereum, and Taiko and a 30-day increase of 0.65%. It has $63.25 million in liquidity, an APY borrow rate of around 1.37%, 95 holders, and a market cap of $235.74 million with a circulating supply of 235.5 million. In contrast, CDP leader MakerDAO has a $4.576 billion market cap and over 4.576 billion DAI in circulation, using Ethereum-based collateral.
The DeFi lending marketplace, an on-chain alternative to traditional banking where digital assets are pledged for borrowing and lending, was valued at $13.61 billion in 2022 with about $25 billion in debt outstanding. Despite its current relatively small size, the global stablecoin DeFi market is projected to have a 46% CAGR in the next six years, positioning USDa as a potential strong competitor in the decentralized financial lending space.
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