Paxos Labs Introduces PAXGy, a Yield-Bearing Gold Token

Paxos Labs has launched PAXGy, a new token backed by PAXG that enables holders to earn returns denominated in gold. The token is now live across multiple platforms including OKX, X Layer, Uniswap, 0x, and Ether.Fi.

PAXGy functions differently from standard tokenized gold. Each PAXG token represents physical gold held in institutional custody and subject to regular attestation. PAXGy holders can deposit PAXG or swap supported stablecoins to obtain the new token. The underlying reserves are then deployed to vetted institutional borrowers through the gold-leasing market.

Rather than increasing the number of tokens held, returns from these strategies accrue through the exchange rate. Each PAXGy token becomes redeemable for more PAXG over time as the strategy generates returns.

Risk Profile Differs From Standard Gold Exposure

Paxos Labs has emphasized that PAXGy carries different risks than direct physical gold ownership. Deploying gold reserves into external lending strategies introduces credit, liquidity, and market risks. If borrowers default or underlying strategies suffer losses, the exchange rate can decline. The company explicitly states that growth is not guaranteed.

PAXG is designed around direct exposure to physical gold, while PAXGy adds a yield-generating component on top of that exposure.

According to Paxos Labs, tokenized gold has grown beyond $5 billion in total value, with trading volume in the first quarter of 2026 exceeding the entire volume from 2025. PAXGy represents an attempt to make the tokenized gold market more financially productive by connecting it to gold-lending markets rather than simply digitalizing ownership.