Avalon Labs is bringing its Bitcoin-backed lending infrastructure to the Pharos Network through a new partnership with FunctionBTC, a move aimed at expanding the use of Bitcoin liquidity in the fast-growing RealFi sector.
The announcement comes as Avalon reports more than $3.1 billion in cumulative Bitcoin loan volume, supported by over 20,000 BTC processed through its platform. The integration will introduce lending markets for FBTC, FunctionBTC’s tokenized Bitcoin asset, alongside USDC on the Pharos blockchain.
Avalon Labs has facilitated over $3.1B in Bitcoin loan volume across 20,000+ BTC. Now we’re bringing that infrastructure to @pharos_network.
Together with @FunctionBTC, the leading institutional Bitcoin tokenization protocol — we’re deploying FBTC and USDC lending on… pic.twitter.com/zcdckC1ngB
— Avalon Labs (@avalonfinance_) June 17, 2026
Bitcoin liquidity moves towards RealFi
The partnership is designed to connect Bitcoin capital with real-world financial applications being developed on Pharos, a Layer-1 blockchain focused on RealFi. Through the integration, users will be able to use FBTC as collateral for borrowing and lending activities while gaining access to USDC liquidity within the ecosystem.
Avalon has built its reputation around Bitcoin-backed lending products, including decentralized and hybrid lending models, yield-generating accounts, and USDa, its Bitcoin-collateralized stablecoin. The protocol has positioned itself as a platform focused on fixed-rate borrowing, transparency, and institutional-grade security.
By extending its services to Pharos, Avalon aims to make Bitcoin a more productive asset rather than a passive store of value.
Can Pharos Network Scale Into Institutional RealFi Infrastructure?
Pharos Network has been developed to support tokenized real-world assets, on-chain yield products, and institutional financial applications. The network features high transaction throughput, sub-second finality, and compliance-focused tools such as built-in identity verification capabilities.
The blockchain has also expanded its financial infrastructure through previous integrations with USDC settlement solutions and partnerships focused on advancing RealFi standards.
The addition of FBTC and Avalon’s lending services is expected to strengthen liquidity options for both institutional and decentralized finance participants operating on the network.
How fast is Bitcoin getting integrated in on-chain finance?
The partnership reveals a trend of Bitcoin becoming increasingly integrated into decentralized financial markets. Tokenized Bitcoin assets such as FBTC are enabling holders to access lending, yield opportunities, and other financial products without selling their underlying BTC exposure.
Meanwhile, Pharos Network introduced a pre-mainnet liquidity program titled “Stake before the Stake,” designed to attract early capital into its Real World Asset (RWA) ecosystem ahead of the upcoming “Pacific Ocean” mainnet launch. For Pharos, the partnership brings new sources of Bitcoin and stablecoin liquidity.
As RealFi adoption grows, the integration could further expand Bitcoin’s role as collateral supporting next-generation financial products across blockchain ecosystems.
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