The first Bitcoin-backed overcollateralized stablecoin in history, USDa from Avalon Labs, has crossed a new milestone in a very short time span after launch.
The coin now has more than 100 million units in circulation and $200 million in collateralized Bitcoin assets. Additionally, Avalon Labs has also announced the launch of a $50 million deposit quota, which will provide participants with 3x points rewards in addition to floating APY ranging from 20% to 50%.
The milestone seems in tandem with other peers in the stablecoin market given the rise in demand and investor optimism.
USDa Sees Huge Demand Soon After Launch
The world’s first Bitcoin-backed stablecoin, USDa, was introduced by Avalon Labs on November 11th, 2024. Just a few hours after the debut, the coin saw a huge demand from investors, making a significant move in the market.
The coin allows Bitcoin owners to access liquidity without having to sell their cryptocurrency. With its integration with the DeFi and CeFi ecosystems and its foundation in LayerZero technology for cross-chain compatibility, USDa establishes Bitcoin as a key force in the digital economy.
A new use case for Bitcoin is represented by the USDa stablecoin, which gives holders of BTC the opportunity to access liquidity and take part in DeFi protocols that generate yield.
Additionally, participation in a range of decentralized financial activities is made easier by USDa, which offers users access to liquidity while maintaining Bitcoin ownership at a fixed 8% borrow rate.
Stablecoin Growth Sees Investors Bet Higher
Many investors have shifted their focus on stablecoins in the market given the popularity and rise in demand.
As evidence of this growing popularity, TRON just recently has surpassed a 33% market share in the Stabecoin market.
Since “unpegged” cryptocurrencies are roughly ten times more volatile than major national currencies, stablecoins are popular because they are thought to be less volatile.
For market participants, its stability and lower volatility have made it more alluring. Stablecoin use and issuance are expanding globally as a result of its popularity, and the market is expected to reach $3 trillion in the next five years.
Over the past few months, stablecoin’s supply has grown dramatically. In September, the stablecoin supply reached $162.1 billion, up $4.7 billion from August, or 3% per month, according to Artemis’ data.
This movement reflects several market trends, including increases in confidence, institutional adoption, and the need for stability and liquidity.
The purpose of stablecoins is to be widely used in everyday transactions, particularly for rapid and low-cost international payments.