Kevin Huynh, introduced on Unchained Premium as co-founder and CEO of Xash, said the startup wants stablecoin issuers to pay for tokenized-gold rewards that users earn by putting their dollars to work in DeFi, instead of yield for simply holding a token.
“The issuer is our customer,” Huynh said on the show, which was recorded Oct. 1.
Users connect a Phantom or Solflare wallet to Xash’s non-custodial Solana front end and route stablecoins to outside DeFi venues such as Kamino to trade, lend or provide liquidity. Xash scores that activity in points it calls XP and, at the end of each month, splits a pool of gold among users by points. “It’s currently Paxos Gold on Solana,” Huynh said on the show, referring to the PAXG token.
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Who Pays for the Gold
For now, Xash buys the gold out of what Huynh called a market development fund, “using venture capital money to test the hypothesis that we can use this gold reward,” he said on the show. He said the startup is “intentionally not working directly with any stablecoin provider.” Xash is “in conversations with multiple of them, but we’ve not struck any contracts,” Huynh said.
As an example, Huynh pointed to PayPal USD (PYUSD). He said on the show that PayPal had “put up their own $2.9 million of capital to try to hit this rough 6% yield” for PYUSD users in a Kamino vault. Unchained could not independently verify those figures.
Huynh said on the show that paying yield on idle balances is “not the direction that stablecoins are headed, given government pressure and where the government’s really headed as well.” The GENIUS Act bars issuers from paying holders interest or yield solely for holding, using or keeping a payment stablecoin.
Built to Work Without Clarity
Host Laura Shin, describing the Clarity Act, said on the show that under the bill’s proposed rules, “the yield was contingent on activity, not just the balance.” The bill stalled when a Senate cloture vote failed Sept. 15. Huynh said on the show that Xash’s design, “irrespective of Clarity, would solve the problem that issuers were having.”
The model replaced an earlier plan for a gold-backed synthetic dollar, Huynh said, after the team chose to keep the stablecoin and reward separate. He noted that Tether had already tried one. Tether announced on June 17 that it would wind down that token, aUSDT, and its Alloy platform, with a Sept. 17 deadline for holders to return it.
Huynh said on the show that Xash was in closed beta and he hoped to open it publicly the following week. As of Oct. 12, Xash’s website called the program an open beta and said PYUSD activity earns gold.
Watch the full conversation on Unchained Premium: Premium members get the complete interview with Xash’s Kevin Huynh on whether gold rewards can solve the stablecoin distribution problem. Watch it here.
