Paxos Labs launched PAXGy on Sept. 24, a token that lets holders earn yield on tokenized gold by lending reserve assets to institutional borrowers, according to the company's product page and a PRNewswire release.

The token builds on PAX Gold (PAXG), the gold-backed token issued by Paxos Trust. PAXGy balances stay flat in number; lending income is intended to increase the amount of PAXG redeemable per token over time. Returns accrue in gold rather than dollars.

On launch day, Paxos Labs' transparency dashboard reported 61.63 fine ounces of total gold backing, with 20% parked in a liquid PAXG reserve and 80% deployed in gold leasing. The liquid slice is designed to meet redemption requests without forced unwinds of lease positions.

What credit risk do holders inherit?

The lending layer adds exposure that PAXG on its own does not carry. Paxos Labs' launch disclosure states that borrower losses or defaults can push the exchange rate downward, leaving holders with fewer PAXG per PAXGy. Spot gold-price moves also shift the dollar value of the position.

The product page describes borrowers as participants in the physical gold supply chain and gold financing markets, but stops short of naming individual counterparties or specifying collateral ratios. It says collateral requirements reduce, but do not eliminate, default risk.

How does PAXGy sit against the broader market?

PAXGy enters a tokenized-gold market that dwarfs its launch balance. CoinGecko recorded roughly 434,899 PAXG in circulation and a $1.85 billion market capitalization on Sept. 24. Tether Gold's market value stood at about $2.66 billion the same evening.

The yield-bearing slice of that market already has a competitor. Theo's thGOLD launched in January and tracks the MG999 Onchain Gold Fund, which extends gold-denominated loans to retailers. Theo identifies Singapore-based Mustafa Gold as the fund's initial borrower. Paxos Labs has not disclosed comparable counterparties for PAXGy.

How do redemptions actually flow?

Direct minting and redemption are restricted to institutional counterparties that complete onboarding under PAXGy's terms of use. The integration guide requires approved wallet addresses and routes issuer redemptions through a withdrawal queue, rather than processing them as instant transactions. OKX's launch notice says redemptions may incur withdrawal fees.

Physical delivery introduces an additional gate. PAXG's terms require a minimum of 430 PAXG plus fees to redeem for a London Good Delivery bar. Holders keeping PAXGy on X Layer must first bridge back to Ethereum before converting into PAXG, per the Paxos Labs developer guide.

Where is the token tradable?

Trading access at launch includes a PAXGy/USDG pool on Uniswap's X Layer deployment through OKX Wallet, according to OKX's launch notice. Paxos Labs' transparency page also lists the 0x DEX aggregator as live and identifies Ethereum and X Layer as the supported networks. No centralized exchange listings were disclosed at launch.

What jurisdiction restrictions apply?

The product page states PAXGy is unavailable in the U.S. and European Union. Paxos Labs has not published a timeline for jurisdictional expansion or for naming additional borrowers in its gold leasing book, leaving institutional clients to monitor the transparency dashboard for updates to the 61.63-ounce backing figure and the 20/80 reserve split.