As a seasoned analyst with over two decades of experience in the financial industry, I find the collaboration between Paxos International and Arbitrum highly intriguing. Having closely followed the evolution of stablecoins and their role in driving decentralized finance (DeFi) growth, it’s clear that the addition of Lift Dollar to the Arbitrum network is a strategic move.
Paxos International unveils the Lift Dollar, a stablecoin that generates returns, on the Ethereum‘s layer 2 platform, Arbitrum.
On October 9th, Paxos’ UAE-based division, overseen by the Abu Dhabi Financial Services Regulatory Authority, declared the extension of Lift Dollar (USDL) to the Arbitrum network.
Paxos’ recent announcement follows closely on the heels of their disclosure about integrating their products with Ethereum’s Layer 2 scaling solution, which they unveiled a few weeks ago.
What is Lift Dollar?
The USDL is a digital currency that maintains a 1-to-1 value with the U.S. dollar and provides returns from its assets, which include cash and liquid investments. Lift Dollar employs an Ethereum-based smart contract system to automatically distribute these returns to qualified wallets on a daily basis, without requiring additional actions from holders.
Using Lift Dollar as a controlled digital asset with earning potential, developers working within the Arbitrum ecosystem gain access to an additional resource for constructing and launching innovative Decentralized Finance (DeFi) projects that contribute to the sector’s expansion.
A.J. Warner, Offchain Labs’ chief strategy officer, pointed out that integrating USDL has a positive impact on Arbitrum. This stablecoin enables affordable and swift transactions within the L2 network, as per Warner, and it presents valuable opportunities in sectors like gaming, social media, and decentralized finance, with potential benefits for these areas.
These ecosystems, fueled by the growing adoption of stablecoins worldwide, are becoming more prominent. Among the key players in this field are Paxos, Tether, and Circle.
Paxos and Arbitrum partnership
In June 2024, Paxos International introduced the Lift Dollar (USDL). This digital currency was disseminated through collaborations with significant cryptocurrency exchanges, digital wallets, and trading platforms.
The firm enabled both individual and institutional purchases, but specified that some geographical areas had restrictions. These regions encompassed places like the U.S., UK, Canada, Hong Kong, and the European Union, as well as other similar locations.
By September 2024, Paxos unveiled their intentions to collaborate with Arbitrum. This partnership was designed to streamline the process of incorporating institutional entities within the Arbitrum network. Through this collaboration, Paxos would play a key role in making it possible to transfer real-world assets onto the platform using its regulated asset services.
Paxos offers a range of other regulated digital currencies, such as the Pax Dollar (equivalent to US dollars), PayPal’s USD (abbreviated as PYUSD), and Pax Gold (backed by actual gold).
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2024-10-09 18:55