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 company Paxos.
Through the new Amplify, Paxos Labs believes it can make it super easy for users to earn returns, 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 leading the latest fundraising round, said:
The infrastructure problem has largely been solved. The product problem, what users and platforms actually do with these assets in the chain, is the biggest open opportunity in fintech today, and this is the team to build it.
For the unfamiliar, Paxos is a white label publisher or simply a service provider that helps other companies create and manage their own stablecoins.
However, the Paxos Labs spin-off was necessary to address the lack of clarity associated with DeFi regulations. Now the team wants to go beyond branded stablecoins.
Paxos Labs’ Amplify plans
Amplify is a new stack from Paxos Labs that allows users to store, earn, and borrow assets. For institutions, Amplify wants to help apps and other fintechs make assets in the chain more productive.
The end goal? Offer users the opportunity to earn returns.
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 bringing in people. 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 such as privacy-focused chain Aleo, neobank Hyperbeat and Toku, which recorded a rise in assets under management after it went live last week.
The project uses the falling Fed interest rate as a catalyst for users to deploy capital in the chain. Still, returns on the chain have cooled significantly, as have the broader market.
In fact, the total value is captured in major return protocols such as Spark Savings and Pendle decreased from $18 billion in September 2025 to $6 billion in April 2026.
That is a decrease by a factor of three, which underlines the risk among investors for the return on the chain.
Final summary
- Paxos Labs has raised $12 million led by Blockchain Capital to solve a so-called ‘product problem’ that can scale on-chain yield and make crypto productive.
- Demand for on-chain returns has fallen three times from a peak of $18 billion in September to the current level of $6 billion.