Paxos Labs to use $12M raise toward yield, lending, issuance tools

Backed by Blockchain Capital, the Amplify suite aims to enable platforms to generate yield and offer lending using customer-held digital assets.

Paxos Labs has raised $12 million in a strategic funding round led by Blockchain Capital to expand its Amplify platform, a suite of tools that lets companies offer crypto yield, lending and stablecoin issuance through a single integration.

The Amplify suite includes three modules — Earn, Borrow and Mint — allowing platforms to generate yield on digital assets, enable crypto-backed loans and issue branded stablecoins with a single integration designed to unlock additional features over time.

According to Tuesday’s announcement, the platform provides a single SDK with configurable controls, while Paxos Labs manages liquidity, counterparty vetting and backend operations, and shares a portion of generated revenue with integrating partners.

The company said partners including Aleo, Hyperbeat and Toku are already using the platform, with Hyperbeat reporting more than $510,000 in assets under management since launching on April 9. The raise also included participation from Robot Ventures, Maelstrom and Uniswap.

Paxos Labs operates as an incubated unit within Paxos, which has processed more than $180 billion in tokenization volume for institutional clients, according to the company. 

The launch targets platforms already offering crypto custody or trading, positioning the tools as a way to turn passive digital asset balances into active, revenue-generating financial products.

Related: Coinbase USDC revenue may multiply 7x as payments grow, Bloomberg says

Crypto platforms have been expanding beyond custody and trading as they look to generate additional revenue from user-held digital assets.

In March, Kraken integrated a structured products platform from STS Digital, enabling options-based strategies designed to generate fixed returns on Bitcoin (BTC) and Ether (ETH). Also last month, Coinbase introduced a tokenized share class of its Bitcoin Yield Fund on its Base network, offering institutional investors onchain access to yield-bearing crypto exposure.

Both crypto exchanges also offer yield on stablecoin deposits, allowing users to earn returns on assets that would otherwise remain idle, including through integrations with onchain lending markets.

Institutional-focused providers are also extending lending against assets held in custody. In February, Anchorage Digital said it would work with Kamino and Solana Company to let institutions borrow against staked Solana (SOL) without moving assets, while in March, Lombard teamed up with Bitwise Asset Management to offer yield and borrowing against Bitcoin using onchain lending infrastructure.

Meanwhile, debate over yield-bearing crypto products has extended into policy discussions centered around the Digital Asset Market Clarity Act, a proposal that aims to establish a regulatory framework for digital assets in the US.

The American Bankers Association said Monday that allowing stablecoin yield could accelerate deposit outflows from smaller banks, pushing up funding costs and reducing local lending.

Magazine: Clarity Act risks repeat of Europe’s mistakes, crypto lawyer warns

Source: CoinTelegraph