Paxos, a regulated financial services company, launched Wrapped $USDL (wUSDL) on the Injective platform. 

Wrapped $USDL is  stablecoin designed to offer both stability and yield to its holders. As a product of Paxos, it aims to provide a secure 1:1 backing for every dollar held in reserves. 

A New Era of Yield-Bearing Stablecoins?

Stablecoins typically retain any yield generated from reserves. Wrapped $USDL disrupts this model by allowing users to earn daily interest on their holdings, according to an Injective announcement. 

This interest is delivered as dividends, in the form of short-term treasury bills and cash equivalents. With a current annual yield of approximately 4.7%, wUSDL offers a competitive alternative to many existing financial products.

The structure of wUSDL ensures that users can unwrap their tokens whenever they wish, converting them back to the native USDL on the Ethereum blockchain. This flexibility is an advantage for those seeking to maximize their capital efficiency while engaging in the DeFi space.

Benefits of wUSDL in the Injective Ecosystem

The integration of Wrapped $USDL into the Injective platform expands its utility across various decentralized applications (dApps). 

Users can leverage wUSDL as collateral in trading on decentralized exchanges (DEXs) such as Helix or utilize it in lending protocols and money market platforms. As a result, margin trading and liquidity provision can be a part of a broader range of financial strategies.

Additionally, users benefit from the passive yield generated by wUSDL without the complexity of daily token rebasing. 

A Milestone for Tokenized Assets

According to Injective, the launch of Wrapped $USDL marks a significant milestone in the development of tokenized assets on Injective. Recent offerings include BlackRock’s BUIDL index, which tracks various tokenized assets such as Euros, Yen, and Gold.

The BUIDL Fund itself offers stable yields to holders, thanks to its backing of U.S. treasury bills and cash equivalents. With a stable token value of $1, the fund delivers daily dividends distributed monthly. Currently, it has over $500 million in assets under management, establishing itself as the largest tokenized fund to date.

The perpetual market model of the BUIDL Index allows traders to take both long and short positions based on their expectations of supply changes.