YZi Labs Invests in Innovative AI-Backed Stablecoin Protocol
YZi Labs, a venture capital firm co-founded by Binance’s Changpeng Zhao and Yi He, has announced a significant investment in USD.AI, a unique stablecoin protocol that utilizes artificial intelligence (AI) hardware as collateral. This investment underscores a burgeoning trend within the cryptocurrency space, where blockchain technology increasingly intersects with real-world applications, especially in the rapidly expanding AI sector. USD.AI aims to create a yield-bearing stablecoin backed by loans secured by AI hardware, allowing operators to leverage their graphics processing units (GPUs) to obtain financing for scaling their businesses.
Creating Financial Opportunities for AI Innovators
The innovative structure of USD.AI enables the issuance of stablecoins that are fully collateralized at a 1:1 ratio by the value of the underlying AI hardware. David Choi, co-founder of USD.AI, noted that the initiative seeks to establish a “financial primitive” for AI developers who may not have access to traditional financial resources on Wall Street. As such, the stablecoin acts as a scalable financial instrument for AI startups, facilitating capital access without the need for conventional financial intermediaries.
Significant Growth and Strategic Partnerships
So far, USD.AI has achieved a total value locked (TVL) of $62 million, reflecting its growing presence in the decentralized finance (DeFi) sector. The protocol has also secured partnerships with multiple lending platforms, such as K3 Capital, Concrete, Euler, and Pendle, which contribute liquidity and support to the USD.AI network. Dana Hou, an Investment Partner at YZi Labs, highlighted the firm’s focus on supporting initiatives that bridge blockchain technology with real-world applications. This investment aligns with a broader movement within DeFi to tokenize physical assets, thereby improving liquidity and accessibility.
Yield Farming Opportunities for Users
Individuals interested in engaging with the USD.AI ecosystem can participate in a points-based campaign called “Allo.” This program includes two yield farming strategies—Basic and Advanced—offering varying return potentials. The Basic strategy yields a 6% annual return with 2x Allo points daily, while the Advanced strategy promises a higher annual yield of 16% and 10x Allo points. These strategies are designed to incentivize early participation and foster community involvement, with a referral system that provides an additional 10% boost to user yields.
Market Performance and Challenges Ahead
Currently, the USD.AI stablecoin is accessible on decentralized exchanges such as Curve (Arbitrum), where it has generated a trading volume of $984,961.17 in the past 24 hours. Market data indicates that USD.AI holds the 765th position on CoinGecko, with a market capitalization of BTC466.5860 and a fully diluted valuation of BTC466.5811. The circulating supply stands at 53 million, with its price fluctuating between BTC0.058030 and BTC0.059387.
Despite these promising growth indicators, the model presents distinct risks due to the inherent volatility associated with the valuation of AI hardware. Unlike traditional stablecoins that are backed by fiat or cryptocurrency assets, the worth of USD.AI relies on the swiftly changing AI computing environment. Factors such as hardware depreciation, technological advancements, and shifts in market demand could impact its stability. Consequently, analysts argue that the future success of USD.AI will hinge on its ability to navigate these challenges while expanding its lending and yield generation capabilities.
