Paxos Labs Launches PAXGy, Token Backed by Gold Market Performance
Paxos Labs has launched PAXGy, a new token backed by PAX Gold (PAXG), designed to increase in value in gold terms rather than dollars. The reserves backing PAXGy are deployed through institutional gold-lending markets, with the resulting yield increasing the amount of PAXG that can be exchanged for each PAXGy.
PAXGy holders will not receive a share of the profits as their holdings increase, but instead, the value of their PAXGy will rise based on the performance of gold in the market. To obtain PAXGy, users must either deposit PAXG or exchange it for a corresponding stablecoin.
The reserves backing PAXGy are divided between those held as collateral against loans to institutions and those used for actual lending. Paxos Labs has partnered with Chainlink's Cross-Chain Interoperability Protocol (CCIP) to enable seamless cross-chain messaging, allowing PAXGy holders to transfer their positions across different blockchains without having to sell or redeem.