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June 18, 2025 – BitVault, a pioneering DeFi protocol poised to redefine Bitcoin’s role in stablecoin infrastructure, today announced the successful close of a $2 million pre-seed funding round. This strategic investment, backed by leading players in the digital asset space including GSR, Gemini, Auros, and Keyrock, signifies a major step towards building what BitVault terms the "next era of BTC-backed money"—an institutionally-aligned alternative to traditional fiat-pegged stablecoins.
The capital raised will support the imminent mainnet deployment of BitVault’s core offerings on the Katana chain in June 2025: bvUSD, an overcollateralized stablecoin backed primarily by Bitcoin derivatives, and sbvUSD, its yield-bearing variant powered by institutional trading strategies.
"Bitcoin was built for moments of fracture. BitVault was built to make it usable,” said Michael Kisselgof, Core Contributor of BitVault and VaultCraft, whose team also manages BitVault’s smart contracts. “We specifically onboarded GSR, Auros, and Keyrock as strategic investors that can also execute high yielding, non-directional strategies to create demand and deep liquidity for BTC-backed money.”
BitVault arrives at a critical juncture for stablecoins, offering a crypto-native solution for stability amidst a fragmented global monetary environment. Unlike traditional fiat-backed stablecoins like USDC or algorithmic options, bvUSD is collateralized by crypto assets, primarily Bitcoin derivatives, and employs various stability mechanisms to maintain its peg. Its permissioned design addresses challenges faced by fully decentralized stablecoins, including scalability issues and lack of user incentives, by combining traditional financial infrastructure with decentralized elements.
Key Features and Innovations of the BitVault Protocol:
- Institutional-Grade Design: BitVault is a hybrid friendly fork of Liquity V2, re-engineered under a licensed deployment agreement with Liquity AG for institutional use. It combines Liquity V2's immutable, governance-free, and autonomous risk management features with a permissioned borrowing layer.
- BTC-Backed Stability: bvUSD is a capital-efficient stablecoin backed by underlying BTC collateral held in qualified custody, free of smart contract risk.
- Yield-Bearing sbvUSD: The staked version of bvUSD, sbvUSD, offers holders the potential to earn a target 10% APY. This yield is generated from a multi-strategy, tokenized yield product managed by Keyrock and powered by institutional trading strategies from GSR, including delta-hedging Bitcoin, Ethereum, and Solana spot assets using perpetual and deliverable futures contracts, as well as holding liquid stables.
- Permissioned Borrowing: Only whitelisted institutional borrowers can mint bvUSD in bulk, mitigating risks associated with overleveraged or anonymous borrowing, while anyone can mint bvUSD using other stablecoins.
- Dynamic Borrow Rates: User-set borrow rates ensure interest revenue flows back to bvUSD depositors.
- Katana Chain Deployment: BitVault will serve as a core stablecoin protocol on Katana, a new DeFi-first chain incubated by Polygon Labs and GSR, prioritizing deep liquidity and user rewards.
- VCRAFT Token: An upcoming VCRAFT token will govern future protocol parameters and serve as a rewards mechanism for stability providers and liquidity contributors.
"We’re seeing growing interest in BTC-backed stablecoins, especially those designed to integrate seamlessly into DeFi ecosystems,” said Alain Kunz, Director from GSR, who participated in the round. “BitVault’s approach with experience in institutional-grade yield strategies positions it well for success. We’re particularly excited about its deployment on Katana, a DeFi centric chain we helped incubate. BitVault adds to Katana’s evolving ecosystem by introducing a new layer of stablecoin utility, enabling BTC to take on a more productive role within Katana’s high-yield DeFi stack.”
BitVault’s roadmap includes broader integrations across DeFi ecosystems and centralized liquidity venues, expansion of its stablecoin suite to support additional BTC-based collateral assets, and active onboarding of institutional borrowers. The protocol also supports Mastercard, further bridging traditional finance with the crypto world.
About BitVault:
BitVault is a DeFi protocol that offers a crypto-native solution for money through its BTC-backed stablecoin, bvUSD, and a yield-bearing staked stablecoin, sbvUSD. Designed for institutional-grade, capital-efficient stablecoin solutions, BitVault features user-set interest rates, multi-collateral backing, and enhanced liquidity mechanisms, building on a licensed fork of Liquity V2 and deployed on the Katana chain.
Contact:
press@bitvault.finance
info@bitvault.finance
Compiled by CMO Intern team
