Quick Take
- Avant Protocol secured $6.5 million in a seed funding round, achieving a valuation of $25 million.
- Built on Avalanche, Avant is a crypto yield protocol that introduces a yield-bearing, “stable-value” token, drawing comparisons to the well-known Ethena.
Avant, a cutting-edge crypto yield protocol developer akin to Ethena Labs, has confidently secured $6.5 million in a competitive seed funding round.
The round attracted strategic investments from Superlayer, Avalaunch, GoGoPool, Daybreak Digital, and Linda Kreitzman. While these names may not dominate headlines, Avant’s founder, Rhett Shipp, emphasized a deliberate strategy of leveraging the team’s robust network of contacts and angel investors rather than chasing high-profile crypto venture capital firms.
“Our team has deep roots in DeFi and years of experience. We prioritized speed and investment diversity over prestige,” said Shipp, who also founded the DeFi protocol Gravita.
Established in June of this year, Avant began exploratory discussions with potential investors in May, transitioning to formal fundraising efforts in October. The funding round, finalized earlier this month, was structured as a simple agreement for future equity (SAFE), placing Avant’s post-money valuation at an impressive $25 million, according to Shipp.
What is Avant?
Avant offers a high-performance “stable-value” token, avUSD, which users can stake to unlock savUSD, a yield-generating version of the token.
Minting avUSD is simple: users deposit stablecoins, such as those issued by Circle or Tether, into the Avant Protocol, built on the robust Avalanche blockchain. While avUSD itself does not accrue yield, it is purposefully designed for seamless integration into DeFi activities, including borrowing and lending.
To earn yield, users stake avUSD to mint savUSD, which currently delivers an impressive 34% annual percentage yield (APY), as reported on Avant’s official platform. This exceptional yield is powered by Avant’s partnership with on-chain asset manager 0xPartners, which employs sophisticated delta-neutral trading strategies. By offsetting the price risk of spot positions with opposing futures positions, 0xPartners ensures consistent returns for savUSD holders.
For context, Ethena—a major player in the DeFi ecosystem—offers a yield-bearing token, sUSDe, that also utilizes delta hedging strategies. Ethena’s APY stands at 25%, with a formidable total value locked (TVL) exceeding $4 billion and a user base of approximately 313,000 active participants.
With its innovative strategies and competitive yield offerings, Avant is carving a distinct niche in the evolving DeFi landscape.
Avant Protocol is in its early phases, operating in an “early access” mode that enables minting and staking of avUSD exclusively for a select group of whitelisted addresses. This whitelist is set to expand in the coming weeks, according to Shipp, who also confirmed that a full public launch of avUSD and savUSD is slated for December.
Currently, Avant boasts a Total Value Locked (TVL) of over $5 million, supported by fewer than ten depositors. Shipp expressed confidence that these numbers will rise significantly as the protocol’s early access program widens.
Avant vs. Ethena
When asked how Avant sets itself apart from Ethena, Shipp confidently pointed to Avant’s more versatile approach to yield generation.
“Ethena’s USDe generates yield primarily through the ‘carry trade,’ which can deliver high returns under certain market conditions but underperforms in others,” Shipp explained. “While Avant also engages in the carry trade, we go further by executing additional market-neutral strategies when the carry trade is less lucrative. This diversified approach has consistently delivered significantly higher yields compared to Ethena. Even in favorable conditions for the carry trade, we are confident in our ability to execute it more efficiently than our competitors.”
Shipp also highlighted Avant’s unwavering commitment to decentralization. “Avant operates 100% on-chain. We firmly believe DeFi is the future and has now reached a level of maturity that allows us to scale yield-generating, market-neutral tokens entirely without centralized exchanges,” he said.
Avant’s business model includes a performance fee on generated yield, starting at 10%. Looking ahead, the protocol is preparing to launch its native governance token, AVANT, in Q1 2025. “The token will feature a ‘vote escrow’ mechanism, empowering holders with governance rights, including the ability to oversee future token emissions,” Shipp added.
Currently, Avant operates with a lean team of eight, with no immediate plans for expansion, according to Shipp.