Paxos Labs Launches Gold Token That Can Earn A Return In Gold
Paxos Labs has introduced PAXGy, a token built on top of PAXG, the gold-backed token each unit of which represents physical gold held in institutional custody. PAXGy lets users deposit PAXG or supported stablecoins, then uses the backing assets in vetted institutional lending and bullion-market strategies. If those strategies earn returns, the value is reflected in the PAXGy exchange rate, so the token balance can stay the same while each token becomes redeemable for more PAXG over time. This yield model comes with added risk. Paxos warns that credit, liquidity, and market losses can reduce the exchange rate, unlike plain gold exposure through PAXG. PAXGy launches with support from OKX, X Layer, 0x, Uniswap, Ether.Fi, and Chainlink. Paxos says tokenized gold has surpassed $5 billion in total value and trading volume in early 2026 already exceeded all of 2025, showing growing demand for tokenized gold products.
