Avant Raises $6.5M in Seed Funding

Avant, a crypto yield protocol developer similar to Ethena Labs, announced it has raised $6.5 million in a seed funding round.

Investors and Funding Structure

The round saw participation from firms like Superlayer, Avalaunch, GoGoPool, Daybreak Digital, and Linda Kreitzman. Avant’s founder, Rhett Shipp, shared with The Block that they focused on their existing network of contacts rather than seeking high-profile crypto venture capitalists.

> “Our team has been operating in DeFi for many years, and we prioritized speed and diversification of investments over high-profiles,” said Shipp, who also founded the DeFi protocol Gravita.

Avant, founded in June of this year, initiated informal discussions with investors in May, officially starting its fundraising efforts in October. The funding round, which closed earlier this month, was structured as a simple agreement for future equity (SAFE), resulting in a post-money valuation of $25 million.

What is Avant?

Avant issues a “stable-value” token called avUSD, which can be staked to earn savUSD, a yield-bearing version of avUSD.

To mint avUSD, users need to deposit stablecoins like Circle’s USDC or Tether’s USDT into the Avant Protocol on the Avalanche blockchain. While avUSD itself does not generate yield, it is designed for various DeFi activities, such as borrowing and lending. Yield is earned by staking avUSD to receive savUSD, which currently offers an APY of 34%, according to Avant’s website.

Avant has partnered with on-chain asset manager 0xPartners, utilizing delta-neutral trading strategies to generate returns for savUSD holders. Delta hedging minimizes price risk by opposing futures positions.

Comparison with Ethena

For comparison, Ethena’s yield-bearing token sUSDe also uses delta hedging strategies, currently offering an APY of 25% and boasts a total value locked (TVL) over $4 billion across 313,000 users.

Avant Protocol is still early in its launch, operating in “early access” mode that allows avUSD minting and staking only for a select group of whitelisted addresses, which is set to expand in the coming weeks. A full public launch of avUSD and savUSD is planned for December, and Avant’s current TVL stands at just over $5 million.

Strategy and Decentralization

When asked about Avant’s unique approach compared to Ethena, Shipp emphasized a broader strategy for yield generation. Avant not only employs carry trade but engages in other market-neutral trades, which has resulted in higher yields than Ethena.

Shipp also stressed Avant’s commitment to decentralization, stating, “Avant is 100% on-chain. We believe that DeFi is the future and is finally at a stage where we can scale yield-generating market-neutral tokens without relying on centralized exchanges.”

Avant charges a performance fee starting at 10% on the yield generated and plans to launch a native governance token AVANT in the first quarter of 2025, incorporating a vote escrow mechanism for governance rights.

The Avant team currently consists of eight members, with no immediate hiring plans.

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