Avantis (@avantisfi): Road to Avantis USDC (avUSDC)

Road to Avantis USDC (avUSDC) Unifying liquidity. Unlocking composability. Unleashing the true power of DeFi. As an AMM perpetuals DEX, every trade, every position, and every PnL outcome connects back to our liquidity providers — the lifeblood of the protocol. Until now, liquidity on Avantis was split between two vaults: the Senior Tranche and the Junior Tranche. Each served a different risk appetite - one conservative, one higher-yielding. Together they powered the market-making engine that drives Avantis. While TVL has grown exponentially in the last few weeks, as Avantis has matured, one truth has became clear: fragmented liquidity limits our LP's true potential. It limits composability, capital efficiency, and the ability for our LPs to truly participate in DeFi’s broader ecosystem. Today, we’re changing that, with the introduction of avUSDC: Our unified yield bearing stablecoin vault. avUSDC: From Two Vaults to One. Avantis has moved to a single unified vault: avUSDC. This is a big step toward building the most composable, capital-efficient liquidity layer in DeFi. With the unified vault, all USDC LP deposits now flow into one pool, represented by the ERC-4626 token avUSDC. There’s no action required from LPs - existing deposits in the senior tranche have been auto-migrated to avUSDC. There should be no change in the dollar value of any LPs deposits. To be specific - depositors in the senior tranche have been migrated over to the junior tranche, which has been rebranded and renamed to Avantis USDC (avUSDC). Nothing changes for depositors in the junior tranche (who already own avUSDC), but for senior tranche depositors, the # of avUSDC is calculated with this formula: # avUSDC shares issued = X * seniorSharePrice / JuniorSharePrice Where Junior Tranche Share Price = $1.271447. Senior Tranche Share Price = $1.173824. X = Number of shares previously in the senior tranche. The migration was conducted with several security practices in mind, and was completed safely and successfully. How avUSDC Works Currently, 100% of trading fees (excluding liquidation fees) will be distributed directly to avUSDC holders. 100% yield, one vault, one token. The vault remains the counterparty to all trades on Avantis. When traders lose, those losses accrue into a protocol buffer which is used to settle trader payouts. When traders win, their profits are paid out from the buffer before dipping in from vault. LPs don’t earn from trader losses; instead, they earn from real trading fees generated by platform activity. Risk is managed via the vault buffer, ensuring that LP capital remains protected even during periods of high market volatility. It’s the same philosophy of safety as before, now streamlined into a single structure. Unleashing Composability The shift to avUSDC unlocks a new dimension of possibilities. 1. Composability A single, standardized vault token means avUSDC can integrate seamlessly across DeFi. Imagine splitting it on Pendle into a principal and yield token — enabling speculation, hedging, and structured yield strategies built directly on top of Avantis liquidity. 2. Leverage avUSDC will also be usable as collateral natively within the Avantis earn vault. This opens up looping strategies — where users deposit USDC, mint avUSDC, and re-deploy it with leverage. The result: amplified yield potential, without leaving the Avantis ecosystem. 3. Yield Optionality In the future, idle capital within the vault can opt-into external yield sources (like Maple USD , ENA sUSD or AAVE USDC deposits) — giving LPs exposure to uncorrelated yield streams beyond trading activity. avUSDC becomes not just a vault token, but a DeFi yield primitive — composable, collateralized, and extendable. Another idea is pairing avUSDC with USDC, so that LPs can double dip into extra XP, while creating strong liquidity for avUSDC for advanced DeFi strategies. Why It Matters DeFi is built to be open, composable and rewarding! With avUSDC, liquidity providers no longer have to choose between yield and flexibility. Their deposits can power Avantis, earn trading fees, and still participate in broader DeFi opportunities. It’s a fundamental rethinking of what it means to LP: from a static, siloed position to a dynamic, composable yield engine. The Vision Ahead Avantis TVL has grown exponentially since our token launch. However, the path to $500M+ in USDC TVL requires simplicity and composability. avUSDC goes beyond a simple vault migration, it’s the foundation for everything that comes next with a unified liquidity layer that connects onchain markets, yield strategies, and collateralized leverage into one cohesive system. As we continue building, avUSDC will evolve into the backbone of Avantis’ ecosystem as the bridge between perpetual trading and the wider DeFi landscape. Liquidity shouldn’t be locked. It should move, compound, and grow. With avUSDC, that future is here. The road to scaling avUSDC begins now.