YZi Labs has recently announced a strategic investment in USD.AI, a stablecoin protocol designed to revolutionize infrastructure finance for the artificial intelligence sector. This move highlights YZi Labs’ dedication to supporting foundational infrastructure that addresses the significant capital requirements of the AI industry.
USD.AI, developed by Permian Labs, is a pioneering yield-bearing synthetic dollar protocol that enables infrastructure providers and AI companies to access non-dilutive loans secured by physical compute hardware. Depositors will receive a sustainable asset-backed yield in return. The protocol has garnered support from prominent investors such as Framework, Dragonfly, Digital Currency Group, Delphi, and Fintech Collective.
Unlike traditional financing methods that rely on lengthy approval processes and cash flow projections, USD.AI offers loans secured 1:1 by AI hardware, enabling quick loan closures in under a week. This swift process is a game-changer for capital-intensive sectors, allowing for rapid scaling and growth opportunities.
Since its inception, USD.AI has experienced rapid growth, with total value locked (TVL) surpassing $62.7 million. The protocol’s deposits surged past $10 million in June, steadily climbing into the $30–40 million range in July, and reaching an all-time high in August.
While borrowing activity currently stands at $1.25 million, most users are utilizing USD.AI for savings and yield generation. Strategic partnerships with K3 Capital, Concrete, Euler, and Pendle have played a pivotal role in the protocol’s success, with the launch of innovative “AutoVaults” that offer optimized yields across DeFi markets.
Pendle, in particular, has been a strong supporter, recently introducing Boost USDai and sUSDai vaults that integrate with USD.AI’s ecosystem, providing enhanced incentives for liquidity providers. In a recent development, USD.AI secured $13 million in Series A funding led by Framework Ventures, with plans for a public launch featuring an ICO and a game-based allocation model.
David Choi, co-founder of USD.AI, emphasized the project’s role in providing a lifeline for builders who possess hardware but lack traditional financing avenues. He highlighted the importance of creating a financial infrastructure that supports smaller players in the AI industry.
The backdrop for this innovation is a pressing capital crunch in the AI sector, with analysts estimating a need for over $6.7 trillion in compute infrastructure investments within the next five years. USD.AI aims to bridge this funding gap by providing smaller players with access to financial resources without diluting equity or enduring lengthy approval processes.
In a separate development, YZi Labs has emerged as a driving force behind institutional adoption and ecosystem expansion in the Bitcoin (BTC) and Binance Coin (BNB) ecosystems. Since rebranding in January, the firm has broadened its focus to include artificial intelligence and biotechnology investments while reinforcing its commitment to blockchain.
Notable investments include backing Avalon Labs, a BTC-based platform developing capital markets around BTC-collateralized lending, stablecoin USDa, and credit services. YZi Labs has also ventured into treasury management, supporting the creation of the BNB Treasury Company by 10X Capital, targeting a listing on a major American exchange.
In a recent collaboration with China Renaissance (CR), YZi Labs facilitated the acquisition of $100 million worth of BNB, marking CR as the first Hong Kong-listed firm to hold BNB as a proprietary asset. Additionally, B Strategy, a digital asset investment firm, launched a $1 billion BNB-focused treasury vehicle with backing from YZi Labs, aiming to become the “Berkshire Hathaway of the BNB ecosystem.”
Overall, YZi Labs’ strategic investments in USD.AI and the BTC and BNB ecosystems underscore its commitment to driving innovation and supporting the growth of emerging technologies. Through these initiatives, YZi Labs is paving the way for a more inclusive and robust financial ecosystem for the AI and blockchain industries.