Paxos Labs Launches PAXGy Token

Paxos Labs Introduces PAXGy Token

Paxos Labs has launched PAXGy, a token built on PAX Gold that allows holders to earn returns from gold leasing. The token is designed to increase the amount of PAXG a holder can redeem as its reserves earn returns from gold leasing.

Holders can deposit PAXG or swap accepted stablecoins to receive PAXGy. According to Paxos Labs, lending income accrues through a PAXGy-to-PAXG exchange rate, rather than an increase in token balances.

Background and History of Tokenized Gold

Tokenized gold has been gaining popularity in recent years, with the market seeing significant growth in spot trading volume. In 2025, the total spot trading volume for tokenized gold was $84.64 billion, which increased to $90.7 billion in the first quarter of 2026, according to CoinGecko data.

How PAXGy Works

PAXGy is available through OKX Gold Earn and X Layer, with access through several on-chain platforms. The token's reserves are deployed to vetted institutional gold borrowers, who pay to lease the metal, causing the value of each PAXGy to rise in PAXG terms.

Holders can redeem PAXGy for PAXG, although the amount returned depends on the exchange rate at the time. The structure gives holders a way to seek returns measured in ounces of gold rather than dollars.

Risks and Considerations

Paxos Labs' product notice says PAXGy carries credit, liquidity, and market risks. Returns are not guaranteed, and losses in the external strategies or a borrower default could cause the PAXGy-to-PAXG exchange rate to fall.

For U.S. holders, Paxos' PAXG terms spell out a separate set of redemption conditions. Only verified customers can purchase PAXG from Paxos or convert and redeem it directly through its platform.

Launch and Availability

PAXGy is available at launch on OKX, with additional venues expected to follow. The token is also available through on-chain launch partners, including 0x, Uniswap, and Ether.Fi.

• PAXGy is built on PAX Gold and uses reserves in an external lending strategy.
• The token's exchange rate may be adjusted downward if the strategy incurs losses.
• Holders can move a PAXGy position across supported chains without first redeeming it for PAXG.

Expert Perspective

Bhau Kotecha, co-founder of Paxos Labs, said that gold has been lent for thousands of years, and institutions have earned on their bullion reserves for decades. He added that PAXGy is intended to give token holders access to those economics.

Read also: Prediction Market to Hit $10 Trillion

Charles Cascarilla, CEO and co-founder of Paxos Labs, described PAXGy as a way to put tokenized gold to work after it has been made transferable on-chain.

Implications for Readers in India

The launch of PAXGy has significant implications for readers in India, who can now access gold leasing returns through a tokenized platform. However, it is essential to understand the risks and considerations associated with PAXGy, including credit, liquidity, and market risks.

What to Watch Next

As the tokenized gold market continues to grow, it is essential to monitor the performance of PAXGy and other similar tokens. Readers should also keep an eye on regulatory developments and market trends that may impact the tokenized gold market.

Timeline of Tokenized Gold Development

The concept of tokenized gold has been around for several years, with various companies and platforms exploring its potential. Here is a brief timeline of the major developments in the tokenized gold space:

• 2020: Paxos Labs launches PAX Gold, a tokenized gold platform.
• 2022: Tether Gold is launched, offering another tokenized gold option.
• 2025: Tokenized gold spot trading volume reaches $84.64 billion.
• 2026: PAXGy is launched, offering a new way to earn returns from gold leasing.

Comparison with Traditional Gold Investment

PAXGy offers a unique way to invest in gold, with the potential for returns through gold leasing. Here is a comparison with traditional gold investment options:

• Traditional gold investment: Investors buy physical gold or gold ETFs, with returns based on gold price fluctuations.
• PAXGy: Investors earn returns through gold leasing, with the potential for higher returns than traditional gold investment.