PYUSD is PayPal's USD-pegged stablecoin, issued by Paxos. PayPal launched PYUSD on Ethereum in August 2023 and on Solana in May 2024. The Solana deployment grew rapidly: by mid-2025, PYUSD's Solana supply matched its Ethereum supply, and as of April 2026, Solana holds the larger share. This piece explains how PYUSD is issued, how it moves between Ethereum and Solana, where its DeFi liquidity lives on Solana, and the use cases that have driven the growth. The Solana migration is a meaningful case study in how a new stablecoin establishes liquidity on a non-Ethereum chain.
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PYUSD (PayPal USD) is a USD-backed stablecoin issued by Paxos Trust Company under New York State Department of Financial Services (NYDFS) supervision. Each PYUSD is backed by US dollar deposits, US Treasury securities, and similar cash equivalents held by Paxos. Paxos publishes monthly reserve attestation reports detailing reserve composition.
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PYUSD is the first major payment-company-issued stablecoin to deploy on Solana. PayPal's positioning is consumer payments — PYUSD is offered through the PayPal app and Venmo for retail customers — but the onchain version is permissionless. Anyone with a PayPal account can mint PYUSD by funding from their balance; redemption back to USD goes through PayPal's existing rails.
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Per DeFiLlama's stablecoin dashboard, total PYUSD supply across all chains is approximately $1.4B as of April 2026. Solana holds roughly 60% of that, Ethereum 35%, and a few other chains the remainder. Digital dollars explained covers the broader enterprise stablecoin landscape.
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Issuance happens through Paxos. Paxos mints PYUSD on Ethereum or Solana when it receives USD deposits from authorized counterparties (PayPal corporate, institutional partners, market makers). Paxos publishes the issuance addresses and the proof-of-reserves attestation each month.
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For retail users, the flow is abstracted: a PayPal user converts USD balance to PYUSD inside the app, which triggers Paxos to mint PYUSD to the user's PayPal-controlled custody address. The user can then withdraw to a self-custody wallet on Ethereum, Solana, or supported L2s. Withdrawal typically takes minutes; the chain selection is the user's choice.
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Redemption is the reverse: PYUSD returned to a PayPal custody address (or directly to Paxos's redemption flow for institutional partners) is burned by Paxos and the underlying USD is paid out. Paxos's reserve segregation means user funds are bankruptcy-remote from Paxos itself.
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The mint-and-burn model is similar to Circle's USDC. The key difference: Paxos is regulated by NYDFS rather than under federal-only frameworks, which has implications for which counterparties Paxos can serve and what compliance posture issuance follows.
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PYUSD is one of the few major stablecoins to use LayerZero's OFT (Omnichain Fungible Token) standard for cross-chain consistency. Under OFT, PYUSD is locked on the source chain when transferred and unlocked (or minted at parity) on the destination chain. The total supply across chains is bounded by the OFT's lock-and-mint accounting.
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This differs from CCTP (Circle's USDC mechanism), which burns on source and re-mints on destination based on attestation. The OFT approach for PYUSD provides similar end-state guarantees but with different security assumptions: OFT relies on LayerZero's DVN (Decentralized Verifier Network) message verification rather than Circle's centralized attestation service.
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For users, the practical implication is that PYUSD bridging happens through LayerZero-compatible apps (Stargate, the official bridge interface, integrated bridge providers) rather than through CCTP-style burn/mint. Bridge times are typically 2–10 minutes for source-chain finality plus seconds for destination receipt. Cross-chain messaging protocols covers LayerZero alongside other transport options.
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PYUSD's DeFi liquidity on Solana is concentrated in a few venues:

Jupiter routes PYUSD swaps preferentially through Phoenix when CLOB depth is sufficient, falling back to concentrated-liquidity pools for larger trades. Jupiter's documentation describes the routing logic that applies here.
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PYUSD lending APY on Kamino has tracked similarly to USDC through 2026, with somewhat more variance because the smaller pool size makes utilization more sensitive to individual borrower actions. Supply APY of 4–8% is typical, with spikes during high-borrow-demand periods.
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The Solana migration produced several distinct use case patterns:
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Cross-border payments. PayPal's existing remittance corridors (US to Mexico, US to Philippines, US to India) increasingly use PYUSD as the settlement currency in onchain segments. The Solana version is preferred for retail-scale flows because of low transaction fees (under $0.01 per transfer). B2B stablecoin payout APIs covers the rail set for cross-border programs.
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Merchant settlement. Merchants accepting USD-equivalent crypto payments increasingly accept PYUSD on Solana as an alternative to USDC, partly because PayPal's brand recognition reduces compliance/onboarding friction with traditional finance counterparties. Stablecoin payment gateways by use case covers the merchant landscape.
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DeFi yield. Treasury teams and individual users hold PYUSD on Solana to earn lending APY in Kamino or supply LP fees in Orca and Phoenix pools. The yield profile is comparable to USDC, with the trade-off being a smaller liquidity pool and therefore slightly more idiosyncratic risk.
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Trading-pair currency. Several DEX listings use PYUSD as the quote currency for new tokens. The choice is partly liquidity-network-effect (PYUSD pools have grown to support meaningful depth) and partly issuer-specific factors (Paxos's NYDFS supervision can be preferred over Circle's federal posture for certain counterparties).
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Validator and infrastructure rewards. Some Solana validators and infrastructure providers accept PYUSD as a payment option for services (RPC subscriptions, indexer access, validator support). This is a small but growing source of organic flow that doesn't depend on retail or trading patterns.
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Stablecoin-pair LP yield. The USDC/PYUSD concentrated-liquidity pools on Orca and Meteora generate fee yield from the constant rebalancing between the two stablecoins. Annualized fee yield on tight ranges has typically been 6–14% during periods of healthy stablecoin trading volume, comparable to or above lending APY.
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Both are USD-backed, fully reserved, and SPL tokens on Solana. The differences:
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Issuer. Circle for USDC; Paxos for PYUSD. Different regulatory frameworks and reserve composition disclosure cadences.
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Distribution. USDC is distributed through institutional flow primarily; PYUSD is distributed through PayPal's retail user base plus institutional partners. The difference shows up in transaction patterns: PYUSD has higher per-address transaction count but lower average transaction size.
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Cross-chain mechanism. USDC uses Circle's CCTP (burn-and-mint with attestation); PYUSD uses LayerZero OFT (lock-and-mint with DVN verification).
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DeFi liquidity depth. USDC is deeper across all venues. PYUSD has caught up substantially through 2025–2026 but still has wider spreads on large trades. 1:1 stablecoin swap mechanics covers how this manifests in execution.
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PYUSD's growth on Solana is one of the cleanest examples of a stablecoin establishing meaningful liquidity on a non-Ethereum chain. Several factors drove the success:
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Issuer commitment to LP incentives. Paxos and PayPal funded sustained LP-rewards programs on Orca and Raydium pools through 2024–2025, which built deep concentrated-liquidity positions before organic flow could fund them. The incentive program ran long enough to bootstrap Jupiter routing depth, after which volume could sustain itself.
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Solana's transaction-cost advantage. A retail user transferring PYUSD on Ethereum L1 paid $2–10 in gas in 2024–2025; the same transfer on Solana cost under $0.01. For PayPal's payment use cases, this differential made Solana the obvious choice for retail flow. The fee differential also made small-amount LP positions economically viable on Solana, broadening the LP base.
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OFT cross-chain consistency. Using LayerZero's OFT standard meant PYUSD on Solana was the same asset as PYUSD on Ethereum — not a wrapped derivative. This avoided the wrapped-asset trust degradation that hampered earlier non-Ethereum stablecoin deployments. Holders could move PYUSD between chains without changing the underlying claim.
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Wallet integration depth. Phantom, Backpack, and Solflare all integrated PYUSD as a default-displayed token within months of launch, making the asset visible to the Solana retail user base without manual token-import steps.
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The combination produced supply growth that crossed Ethereum's PYUSD supply within roughly 12 months and continued growing afterward. The pattern is observable in Paxos's monthly transparency reports, which break down supply by chain.
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Issuer concentration. Paxos is a single counterparty for PYUSD reserves. Circle's USDC has the same structural risk but with a longer operational track record and broader institutional adoption. Issuer-event risk is real but low in both cases.
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Regulatory framework. NYDFS oversight has historically been considered the strictest US state framework for stablecoins. This is a feature for institutional counterparties who prefer state-regulated issuance, but a constraint on what Paxos can offer (e.g., yield-bearing variants face NYDFS approval requirements).
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Bridge dependency. Cross-chain PYUSD relies on LayerZero. A LayerZero outage or DVN failure would prevent cross-chain transfers, though existing chain balances would remain intact. The risk is functionally similar to CCTP's reliance on Circle's attestation service.
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Liquidity concentration. Orca, Raydium, and Phoenix concentrate most of PYUSD's Solana DeFi depth. Issues at any one venue would meaningfully reduce effective liquidity for traders and treasury teams. Diversification across venues mitigates but doesn't eliminate this.
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Incentive-driven liquidity. Some PYUSD pool depth is sustained by ongoing LP-rewards programs from Paxos and PayPal. If those programs were paused, organic LP would have to substitute or pool depth would compress. The protocol-economics question is whether organic flow has reached a self-sustaining level. As of 2026, the indicators suggest it has, but the dependency is worth tracking for treasury teams sizing positions in PYUSD pools.
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For teams operating across chains, moving PYUSD between Ethereum, Solana, and other chains is a routine operational concern. Eco orchestrates this routing through a unified API. When a treasury team holds PYUSD on Ethereum and needs to deploy it into Kamino or supply LP on Solana Orca, Eco selects the optimal route (typically LayerZero OFT for PYUSD specifically) and handles the bridge step. The handoff to downstream Solana protocols is downstream of Eco's surface — Eco delivers PYUSD to a Solana ATA, the team takes it from there. PYUSD is a partner stablecoin in Eco's stack, alongside USDC, USDT, USDS, and others. Cross-chain liquidity protocols covers the broader rail set Eco operates within. Solana DeFi apps covers the application layer where PYUSD ultimately deploys.
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PYUSD is issued by Paxos under NYDFS supervision and backed by USD deposits and Treasury securities. Paxos publishes monthly reserve attestations. As with any stablecoin, issuer risk is real but has not materialized for PYUSD or for Paxos's other regulated stablecoins.
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Solana's transaction speed (sub-second slot times) and low fees (under $0.01) make it well-suited for retail-scale payment flows. PayPal's customer base is consumer-facing, and Solana's economics favor that segment over Ethereum L1's higher gas costs. The migration also opened access to Solana's growing DeFi base.
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Through LayerZero's OFT bridges (Stargate, the official bridge interface, or integrated bridge providers). The transfer locks PYUSD on the source chain and mints on the destination. Cross-chain orchestrators like Eco handle the routing automatically. Cross-chain messaging protocols covers LayerZero in more detail.
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Yes. Supply PYUSD to Kamino, MarginFi, or Drift Spot for lending APY. Or provide LP in Orca, Raydium, or Meteora pools paired with USDC for fee yield. APY varies with market conditions but typically tracks USDC closely.
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Both are USD-backed, fully reserved stablecoins. Different issuers (Paxos vs. Circle), different regulatory frameworks (NYDFS vs. federal-only), different cross-chain mechanisms (LayerZero OFT vs. CCTP). Functionally similar at the user level on Solana; structurally different at the issuance and bridging layers.
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Lending APY on Kamino, MarginFi, and Drift Spot for PYUSD has typically tracked 4–8% through 2026, similar to USDC. LP yield on USDC/PYUSD concentrated-liquidity pools (Orca, Meteora) has historically been 6–14% on tight ranges, depending on stablecoin trading volume.
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