Paxos South America has officially launched the yield-bearing stablecoin, Wrapped Lift Dollar (wUSDL), within the Injective ecosystem. This new stablecoin allows users to earn yield while engaging with Injective’s suite of DeFi protocols. The yield is generated from short-term treasury bills and cash equivalents, benefiting holders by passing back the returns.
The potential applications for wUSDL are vast, including its use as margin in derivatives trading, participation in lending protocols, or deployment across various money market platforms on Injective. The project has announced here.
A Yield-Bearing Stablecoin
Paxos International issues USDL, a stablecoin backed 1:1 by reserves, ensuring that each USDL corresponds to a dollar held in reserves. Unlike traditional stablecoins where yield from such reserves is typically retained by the issuer, USDL generates daily interest, which is distributed to users as dividends that accrue directly to their wallets.
wUSDL is a wrapped version of USDL, designed to extend these benefits across multiple blockchains. Unlike rebasing tokens that adjust the token count to reflect yield, wUSDL’s value increases over time, capturing daily dividends from treasury yields. Users can unwrap wUSDL at any time to convert it back into USDL on Ethereum.
How wUSDL Works on Injective
As a wrapped asset, wUSDL maintains the price of USDL while incorporating its yield growth. This enables Injective users to participate in various decentralized applications (dApps), such as derivatives trading, lending, and money market platforms, while benefiting from the passive yield generated by USDL’s treasury-backed asset.
wUSDL can be used as collateral or margin in trading on decentralized exchanges (DEXs) like Helix, built on Injective. Furthermore, Injective users have the flexibility to convert wUSDL back to USDL, receiving the native USDL stablecoin on Ethereum along with any additional yield accumulated during their holding period.
A Milestone for Tokenized Assets on Injective
The introduction of wUSDL on Injective marks a significant advancement in the development of tokenized assets within the Injective ecosystem. Injective currently ranks among the top blockchain ecosystems for tokenized assets, including recent additions like BlackRock’s BUIDL index, Euros, Yen, and Gold.
By bridging traditional finance with decentralized finance, Paxos is enhancing user interaction with regulated, yield-bearing assets in the rapidly growing Injective ecosystem. This integration of wUSDL not only enhances capital efficiency but also opens new avenues for passive income generation, paving the way for further innovation in the space.
As Paxos and Injective continue to explore the potential of DeFi, the launch of wUSDL symbolizes the convergence of traditional finance and blockchain technology, empowering users to earn, trade, and invest with increased efficiency and flexibility.
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