Everlong, a synthetic liquidity and yield protocol for Bitcoin and Ethereum, has closed a strategic investment round backed exclusively by GSR. The funding marks a notable bet on synthetic liquidity as a new DeFi building block, especially as protocols search for sustainable yield sources without adding systemic leverage.
The protocol allows users to earn organic, fee-based yield on BTC and ETH while maintaining full price exposure. It plans to launch natively on Katana, an Ethereum Layer-2 network designed for high-performance execution. Katana will route chain-level revenues to Everlong users, creating deeper liquidity and higher long-term yields across its ecosystem.
Synthetic Liquidity as a Yield Mechanism
Everlong increases the working capital of deposited assets inside automated market makers, enabling users to capture swap fees without facing the typical drawbacks of impermanent loss. According to the team, the system has already outperformed simple BTC and ETH holding strategies, including during recent high-volatility periods.
Its model uses a novel CDP-based architecture that generates synthetic liquidity internally. The approach removes borrow-rate drag and avoids liquidation events while maintaining full BTC and ETH exposure. Everlong cites five core advantages: no liquidation risk, no recurring interest costs, high capital efficiency, fee-driven yields, and scalable liquidity supply.
The protocol aims to solve two persistent challenges in DeFi. AMM liquidity provision has remained structurally unprofitable for many users due to impermanent loss and LVR. Meanwhile, CDP-based stablecoins have struggled to source deep, reliable liquidity for meaningful scale. Everlong’s synthetic liquidity engine seeks to address both constraints by allowing user deposits to generate recurring AMM fees while reinforcing the liquidity backbone of CDP protocols.
GSR Positions the Protocol for Institutional Growth
GSR will support Everlong on token design, market structure, liquidity strategy, and institutional integrations across Katana and other ecosystems. The firm also plans to assist with risk modelling and infrastructure development.
“Everlong is pioneering a new category in DeFi: synthetic liquidity as a yield source,” said Alain Kunz, Head of Business Development, EMEA at GSR. He added that Everlong’s architecture “preserves long exposure while turning volatility into sustainable returns,” positioning it to become a core liquidity primitive for BTC and ETH.
“Everlong is exactly the type of high-performance DeFi primitive the Katana ecosystem was built for,” said Alex, DeFi Systems Lead at Katana. He noted the alignment between Everlong’s synthetic liquidity engine and Katana’s execution-focused design.
Everlong’s model could support a range of emerging on-chain markets, including leverage venues, synthetic stablecoins, cross-asset liquidity networks, and unified DEX-lending-synthetic architectures. Its momentum also reflects a wider industry movement toward structured, fee-based yield mechanisms amid reduced appetite for leverage-driven returns.
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