Paxos Introduces PAXGy: A Token That Earns Returns in Gold

Paxos Labs has launched PAXGy, a new token that offers holders a chance to earn a return in gold. The token is backed by PAXG, which represents physical gold held in institutional custody.

The underlying reserves for PAXGy are deployed to vetted institutional borrowers through the gold-leasing market. When these strategies generate a return, it accrues through the PAXGy exchange rate, allowing holders to redeem their tokens for more PAXG over time.

Paxos Labs warns that deploying gold into external strategies introduces credit, liquidity, and market risks. If borrowers default or the underlying strategies suffer losses, the PAXGy exchange rate can move downward, indicating that growth is not guaranteed.

The token is launching with support from OKX, X Layer, 0x, Uniswap, Ether.Fi, and Chainlink. Paxos Labs notes that tokenized gold has now grown beyond $5 billion in total value, with trading volume during the first quarter of 2026 exceeding the whole of 2025.