Stablecoin Yield by Avant

Avant Protocol generates yield on stablecoins through a dynamic, actively managed multi-strategy framework that adapts to evolving market conditions by diversifying across multiple on-chain sources.

Capital is allocated into Avant’s two yield-bearing layers — savUSD and avUSDx — built on top of avUSD:

1. savUSD (Senior Tranche)

   1. The primary yield-bearing token for stablecoin depositors, savUSD offers a lower-risk position protected by the avUSDx junior tranche. Yield accrues as the exchange rate to avUSD increases over time, and any potential strategy losses are absorbed first by avUSDx, making savUSD a more stable-yield instrument.

2. avUSDx (Junior Tranche)

   1. Designed for depositors seeking amplified returns in exchange for higher risk, avUSDx receives a larger share of strategy yield and is deployed into additional DeFi strategies to boost performance. As the protocol’s first-loss capital layer, avUSDx protects savUSD holders in the event of losses.

Avant’s yield generation spans three primary categories

1. Market-Neutral Basis & Funding Strategies

   1. Yield from funding rate differentials in derivatives markets, using spot positions paired with equivalent short futures to remain uncorrelated to market direction.

2. DeFi Liquidity & Lending

   1. Deploying liquidity to vetted DEXes and lending protocols like Aave, earning trading fees or borrower interest.

3. Yield Token Arbitrage & Trading

   1. Engaging with sophisticated yield markets such as Pendle to trade principal and yield components, capturing inefficiencies and time-based arbitrage opportunities.

By combining tranche-based risk management with diversified, market-neutral, and DeFi-native strategies, Avant aims to deliver consistent, risk-adjusted returns on stablecoins while avoiding reliance on any single yield source.