YZi Labs, owned by Binance founders Changpeng Zhao and Yi He, invested in a venture that combines stablecoins with AI hardware.
- YZi Labs, led by Binance founders, invested in USD.AI
- The company will provide a stablecoin backed by AI hardware loans
- AI hardware operators can get loans collateralized by the value of their GPUs
As demand for advanced AI hardware increases, crypto firms are increasingly looking for opportunities in the space. On Tuesday, August 26, YZi Labs, a fund primarily owned by Binance founders Changpeng Zhao and Yi He, announced an investment in stablecoin issuer USD.AI.
The protocol, which is building a yield-bearing stablecoin backed by loans, wants to address the growing demand for AI hardware. Namely, it enables AI hardware operators to put up their GPUs as collateral to secure financing to expand their operations. USD.AI then issues stablecoins, backed 1:1 by this hardware, that bear yield based on these loans.
“We’re building a financial primitive for a new class of builders,” said David Choi, co-founder of USD.AI. “Not everyone has a CFO or a Wall Street connection. But they do have machines, and a future to build. This is a dollar that scales for the Wall Street outsiders, and we’re excited to have YZi Labs’ support in our mission.”
USD.AI reaches $62M in TVL
So far, the USD.AI stablecoin has achieved $62 million in total value locked, backed by loans from AI hardware firms. The protocol has also secured several lending partners, including K3 Capital, Concrete, Euler, and Pendle.
“At YZi Labs, we back builders who bridge Web3 rails with real-world demand,” said Dana Hou, Investment Partner of YZi Labs.
Collateralized loans based on tangible assets are not new. However, loans backed by GPUs bear additional risk, as the prices of this hardware fluctuate rapidly based on demand, depreciation, and potential obsolescence due to competition.
