Paxos Labs has launched PAXGy, a token backed by PAXG that can grow in value relative to gold over time. The reserves behind it are lent to vetted institutional borrowers through the gold-leasing market. PAXGy is now live on platforms including OKX, X Layer, Uniswap, 0x, and Ether.Fi, but returns are not guaranteed.
ID: N25-09
Site: NewsBTC
Status: READY
Author: NewsBTC Editorial Team
Focus Keyword: Paxos
Image Keyword: Gold
Category: Altcoins
Tags: Paxos, PAXG, PAXGy, Gold, Tokenization
Primary Source: https://www.paxos.com/blog
The Token Balance Stays the Same While Its Gold Value Can Grow
PAXGy is backed by PAXG. Each PAXG represents physical gold held in institutional custody, with the reserves regularly attested. PAXGy adds another layer. Paxos Labs says holders can deposit PAXG or swap supported stablecoins for PAXGy. The reserves backing PAXGy can then be lent to vetted institutional borrowers in the bullion market. When those strategies generate a return, that value accrues through the PAXGy exchange rate. The holder’s number of tokens doesn’t have to increase. Instead, each PAXGy can become redeemable for more PAXG over time. That’s a very different model from simply holding tokenized bullion.
Yield Also Introduces Risk That Plain Gold Doesn’t Have
There’s no free yield here. Paxos Labs explicitly 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 fall. Growth is not guaranteed. That distinction matters because PAXG and PAXGy may sound almost identical while representing different risk profiles. PAXG is designed around direct exposure to physical gold. PAXGy adds a yield-generating strategy on top of that exposure. The token is launching with support from OKX, X Layer, 0x, Uniswap, Ether.Fi, and Chainlink. Paxos Labs says tokenized gold has now grown beyond $5 billion in total value, while trading volume during the first quarter of 2026 exceeded the whole of 2025. PAXGy is an attempt to make that market more financially productive. Instead of tokenizing gold simply so it can move onchain, the product tries to connect it to a centuries-old lending market as well. It’s another example of tokenization starting to recreate financial functions around an asset, not merely digitize ownership of it.
This article was written by the News Desk and edited by [Samuel Rae](https://www.newsbtc.com/author/rae-samuel/).
Frequently Asked Questions
FAQs Paxos Labs GoldBacked Token That Earns Returns in Gold
1 What is a goldbacked token
Its a digital token where each unit is backed by real physical gold held in a vault When you own the token you effectively own a claim on that gold
2 What did Paxos Labs just launch
A goldbacked token that not only tracks the price of gold but also lets holders earn returns paid in gold meaning your gold balance can grow over time
3 How is this different from just buying gold
With regular gold you buy and hold With this token you hold and earn your gold holdings can increase through yield rather than just riding the price up and down
4 Is the gold actually real
Yes Paxosbacked tokens are backed 11 by physical gold stored in secure vaults with regular audits to confirm the holdings
5 How do I earn returns in gold
The token generates yield through the underlying structure Those returns are paid out in gold not cash so your gold stack grows
6 What kind of returns can I expect
Returns vary based on market conditions and the programs terms Check Paxos Labs official disclosures for current rates and remember higher yield usually means higher risk
7 Do I need to be a crypto expert to use it
No If you can use a crypto wallet or an exchange app you can likely buy and hold it But understanding the risks still matters
8 Where can I buy it
Through supported exchanges brokerages or platforms that list Paxos Labs products Availability depends on your country
9 Can I redeem it for physical gold
Some goldbacked tokens allow redemption for physical gold often with minimum amounts and fees Check the specific terms before assuming you can
10 What fees are involved
Typically a mix of purchase fees storagecustody fees and possibly redemption fees Read the fee schedule carefully small fees add up over time
11 Is my gold safe if Paxos Labs goes bankrupt
The gold is usually held by a separate custodian which is meant to protect holders Still bankruptcy and legal scenarios can get complicated review the legal structure