- Avalon removed 80M AVL tokens from the supply in a strategic deflationary move.
- Over 100,000 users have claimed $20M worth of AVL through the airdrop in the past year.
- Avalon Labs secured a $2B credit line to expand Bitcoin lending to bigger markets.
Avalon Labs has officially burned 80 million AVL tokens, representing 44% of the circulating supply, in a strategic supply reduction move. According to a post shared via X, the firm permanently removed these unclaimed tokens from a prior airdrop campaign. The announcement caused AVL to jump over 21%, hitting $0.2085 on June 9.
Airdrop Distribution and Community Impact
Avalon Labs stated that over 100,000 users had claimed approximately $20 million worth of AVL via airdrop in the past year. The firm thanked users for their participation, noting that the burn would boost value and encourage decentralized engagement. It added, “We remain committed to aligning incentives between the project and its community.”
The circulating supply dropped to 161.68 million AVL, with total supply now reported at 162.25 million AVL. The firm’s deflationary approach prompted AVL to become the top futures buy on Bybit, reflecting sharp trader interest. The volume-to-market cap ratio surpassed 117%, signaling heightened market confidence and active speculation post-announcement.
The token hit a high of $0.215 before retreating slightly to $0.1904, as per data from CoinMarketCap. The trading volume surged by 120.97% to $36.56 million, while the market cap rose by 8.27% to $30.79 million. This burn initiated a deflationary cycle, aiming to enhance long-term scarcity and align with ecosystem-wide incentives.
Building an On-Chain Bitcoin Capital Market
Avalon Labs operates as a fintech platform creating on-chain capital markets backed by Bitcoin-based infrastructure. To date, it has issued $1.2 billion in overcollateralized Bitcoin-backed loans, with ongoing plans to expand institutional reach. It also secured a $2 billion credit line from Asian financial entities to scale lending operations.
Additionally, the firm created USDa, the first Bitcoin-backed stablecoin, enabling users to access liquidity without selling Bitcoin. Users can borrow Tether at fixed rates and deposit FBTC, a 1:1 Bitcoin-pegged asset, to earn yield via CeDeFi. The platform leverages liquidity schemes from partners such as Ethena Labs, spanning 50+ loan markets and 20+ blockchains.
Related: Avalon Labs, Bybit Launch Fixed-Rate Bitcoin Lending
Institutional Support and Future Strategy
On May 26, YZi Labs announced an institutional strategic backing investment into Avalon Labs. Back in February, Avalon had made public its intention to establish a Bitcoin-backed public debt fund under SEC regulation, with a clear focus on attracting traditional investors. This is another step in the company’s ongoing plan to link crypto finance with the rules of traditional finance.
