# FAQ

<table data-view="cards"><thead><tr><th></th><th data-hidden data-card-target data-type="content-ref"></th><th data-hidden data-card-cover data-type="files"></th></tr></thead><tbody><tr><td>AVL Governance Token</td><td><a href="/pages/rHBj0o1a3cS6Cu5uypRc#avl-governance-token">/pages/rHBj0o1a3cS6Cu5uypRc#avl-governance-token</a></td><td><a href="/files/vw2LAUvYNuNjjUVFvmBr">/files/vw2LAUvYNuNjjUVFvmBr</a></td></tr><tr><td>CeDeFi CDP USDa</td><td><a href="/pages/rHBj0o1a3cS6Cu5uypRc#cedefi-cdp-usda">/pages/rHBj0o1a3cS6Cu5uypRc#cedefi-cdp-usda</a></td><td><a href="/files/kWA4KM75jm0697N7rlXQ">/files/kWA4KM75jm0697N7rlXQ</a></td></tr><tr><td>DeFi Lending</td><td><a href="/pages/rHBj0o1a3cS6Cu5uypRc#defi-lending">/pages/rHBj0o1a3cS6Cu5uypRc#defi-lending</a></td><td><a href="/files/eHsWWJhCb2I9XJMQ7OeJ">/files/eHsWWJhCb2I9XJMQ7OeJ</a></td></tr></tbody></table>

## AVL Governance Token

<details>

<summary>What is the total supply of AVL?</summary>

AVL has a capped total supply of 1 billion tokens, ensuring its scarcity and long-term value retention.

</details>

<details>

<summary>What are the utilities of AVL?</summary>

AVL is central to the Avalon Labs ecosystem, offering a range of powerful utilities including staking for rewards, governance rights through sAVL, and fee rebates on Avalon’s USDa and CeDeFi platforms. As Avalon continues to grow, more utilities will be added to further enhance the value of AVL.

</details>

<details>

<summary>How can I get governance rights?</summary>

By staking your AVL tokens, you’ll receive sAVL, which grants you governance rights. This gives you the ability to vote and actively participate in the decision-making process within Avalon Labs.

</details>

<details>

<summary>What governance rights do sAVL holders have?</summary>

sAVL holders play an influential role in Avalon’s development. They can vote on decisions such as AVL emissions, the introduction of new products, protocol updates, loan parameters, and more, shaping the future of Avalon Labs.

</details>

<details>

<summary>What benefits does sAVL offer?</summary>

Staking AVL to acquire sAVL not only gives you governance rights, but also rewards you with AVL tokens, fee rebates, and the opportunity to directly influence Avalon’s ecosystem. It’s a win-win for long-term holders and community participants.

</details>

<details>

<summary>What fee rebates do sAVL holders get?</summary>

sAVL holders enjoy reduced borrowing costs on Avalon’s USDa and CeDeFi platforms, with fee rebates that are directly proportional to the amount of AVL staked. The more you stake, the greater the benefits, making it an attractive option for active participants.

</details>

<details>

<summary><strong>Have AVL been audited?</strong></summary>

Yes, AVL has been audited by three leading blockchain security firms: [*SlowMist*](https://github.com/avalonfinancexyz/AVL-audit-slowmist), [*BlockSec*](https://github.com/avalonfinancexyz/AVL-audit-blocksec), and [*Salus*](https://github.com/avalonfinancexyz/AVL-audit-salus).

</details>

## CeDeFi CDP USDa

<details>

<summary><strong>What is sUSDa?</strong></summary>

sUSDa is a yield-bearing version of USDa. By staking USDa, you can mint $USDa and earn \~25% APY. The yield comes from fixed borrowing costs on USDa loans and revenue from the USDaLend platform, which is reflected in the price appreciation of $USDa over time.

</details>

<details>

<summary>How can I stake USDa to get sUSDa?</summary>

**If your USDa is on Ethereum:**

Visit the [Staking Page](https://usda.avalonfinance.xyz/stake/)

**If your USDa is on another chain:**

1\. Bridge USDa to Ethereum on [Bridge Page](https://usda.avalonfinance.xyz/bridge/)

2\. Then visit the [Staking Page](https://usda.avalonfinance.xyz/stake/)

</details>

<details>

<summary>Which chains support staking USDa into sUSDa?</summary>

Staking USDa into sUSDa is only available on Ethereum. If your USDa is on another chain, you must bridge it to Ethereum before staking.

</details>

<details>

<summary>Can I swap USDa for sUSDa without staking?</summary>

Yes, you can swap USDa for sUSDa directly on the BNB Chain using our [Swap Page](https://usda.avalonfinance.xyz/swap/). Note that swapping is only supported on the BNB Chain.

</details>

<details>

<summary>How does swapping USDa for sUSDa compare to staking?</summary>

Swapping USDa for sUSDa on the BNB Chain may involve price slippage due to liquidity pool fluctuations. In contrast, staking USDa on Ethereum guarantees conversion into sUSDa at fair price without slippage. However, the benefits of holding sUSDa remain the same regardless of how it was obtained.

</details>

<details>

<summary>What are the rewards for holding sUSDa</summary>

Holding sUSDa earns \~25% APY.&#x20;

The yield is reflected in the increasing price of sUSDa over time.

</details>

<details>

<summary>Where does the rewards for holding sUSDa come from?</summary>

• Fixed borrowing costs on USDa loans

• Revenue from the USDaLend platform

</details>

<details>

<summary>Can I use sUSDa across different chains?</summary>

Yes, sUSDa can be bridged to other chains. Use our [Bridge Page](https://usda.avalonfinance.xyz/bridge/)

</details>

## DeFi Lending

<details>

<summary>How Much Is the Liquidation Penalty?</summary>

The liquidation penalty (or bonus for the liquidator) varies depending on the asset used as collateral.&#x20;

Example Scenarios:

• Example 1:

Bob deposits 10 BTC and borrows the equivalent of 5 BTC in USDT. If Bob’s health factor drops below 1, his loan is eligible for liquidation. A liquidator can repay 2.5 BTC worth of USDT (50% of the borrowed amount). In return, the liquidator receives 2.5 BTC plus a 5% bonus of 0.125 BTC, totaling 2.625 BTC for repaying the debt.

• Example 2:

Bob deposits 5 BTC and 4 BTC worth of ETH, borrowing 5 BTC worth of USDT. If Bob’s health factor drops below 1, his loan is eligible for liquidation. A liquidator can repay 2.5 BTC worth of USDT (50% of the borrowed amount). Since the liquidation bonus for BTC is 15% and ETH is 5%, the liquidator chooses to claim BTC. The liquidator receives 2.5 BTC plus a 15% bonus of 0.375 BTC, totaling 2.875 BTC for repaying the debt.

</details>

<details>

<summary>How to Avoid Liquidation</summary>

To avoid liquidation, users should aim to keep their health factor high. Here are two ways to do this:

1. Deposit More Collateral: Adding more collateral to your position increases your health factor, lowering the risk of liquidation.
2. Repay Part of Your Loan: Making partial repayments increases your health factor more significantly than additional deposits. Regular repayments also help reduce the overall debt.

To avoid liquidation entirely, keep your health factor above 2. This gives you a significant safety margin. Additionally, keep an eye on the price fluctuations of stablecoins like USDC, which may affect your health factor due to market conditions. For example, if USDC is priced at $0.95 instead of $1.00, it can cause your health factor to decrease, triggering liquidation risk.

</details>

<details>

<summary>Can I Participate in the Liquidation Ecosystem?</summary>

Yes, liquidations are open to anyone who wishes to participate, but the competition can be fierce. Most liquidators develop sophisticated bots or tools to get ahead and claim liquidation bonuses quickly. If you have the right strategy and tools, you can profit from liquidating undercollateralized loans.

</details>

<details>

<summary>Why Use Avalon DeFi Lending?</summary>

Avalon’s DeFi lending protocol stands out by offering a highly secure, efficient, and scalable lending platform. With our isolated pools, deep liquidity, and multichain deployment, we provide the best conditions for both borrowers and lenders. Our innovative approach to risk management ensures that your assets are safe, while our liquidation process offers opportunities for liquidators to participate in the ecosystem.

Whether you’re borrowing BTC or BTC LSD tokens or looking to capitalize on lending opportunities, Avalon has the right solutions to meet your needs.

</details>


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