Paxos Labs has raised $12 million to solve what the project calls DeFi’s ‘product problem.’ Notably, Paxos Labs is a spin-off of the crypto infrastructure firm Paxos.
Through its new Amplify, Paxos Labs believes it can make it super easy for users to earn yield, borrow, and lend assets at scale.
In a statement, Spencer Bogart, general partner at Blockchain Capital, an early investor and one of the key firms that led the latest fundraising round, said,
The infrastructure problem is largely solved. The product problem, what users and platforms actually do with these assets on-chain, is the largest open opportunity in fintech today, and this is the team to build it.
For the unfamiliar, Paxos is a white-label issuer or simply a service provider that helps other firms to create and manage their branded stablecoins.
However, the Paxos Labs spin-off was necessary to address the lack of clarity associated with DeFi regulation. Now, the team wants to go beyond branded stablecoins.
Paxos Labs’ Amplify plans
Amplify is a new stack by Paxos Labs that allows users to mint, earn, and borrow assets. For institutions, Amplify aims to help apps and other fintechs make on-chain assets more productive.
The end goal? Empower users to earn yield.
Commenting on the update, Bhau Kotecha, Co-Founder of Paxos Labs, said,
Is ‘buy and hold at JP Morgan’ really what digital assets were built for? That’s a failure. That’s not the mission. The first step was getting people in. The next step is making their assets productive. That’s what we’re building.
According to the team, Amplify has already shown traction. The project cited partners like privacy-focused chain Aleo, neobank Hyperbeat, and Toku, recording a surge in assets under management after it went live last week.
The project is betting on the falling Fed interest rate as a catalyst for users to deploy capital on-chain. Even so, the on-chain yield has seen significant cooling, just like the broader market.
In fact, the overall value locked across major yield protocols like Spark Savings and Pendle has droppedfrom $18 billion in September 2025 to $6 billion in April 2026.
That’s a 3x decline, underscoring a risk-off amongst investors for on-chain yield.
Final Summary
- Paxos Labs has raised $12M, led by Blockchain Capital, to solve what it calls ‘product problem’ that can scale on-chain yield and make crypto productive.
- Demand for on-chain yield has dropped three times from September’s peak of $18B to current $6B levels.
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