"YZi Labs Bets on AI Hardware as the New Collateral for Crypto Finance"

YZi Labs, a venture capital firm co-founded by Binance's Changpeng Zhao and Yi He, has made a strategic investment in USD.AI, a stablecoin protocol that leverages artificial intelligence (AI) hardware as collateral. The move highlights a growing trend within the cryptocurrency ecosystem of integrating blockchain technology with real-world infrastructure, particularly in the high-demand AI sector. According to USD.AI, the stablecoin is designed to be yield-bearing and is backed by AI hardware loans, where operators can use their graphics processing units (GPUs) as collateral to secure financing for expanding their operations [3].

This innovative model allows USD.AI to issue stablecoins that are 1:1 collateralized by the value of the underlying AI hardware. As David Choi, co-founder of USD.AI, explained, the initiative aims to create a "financial primitive" for AI builders who lack traditional Wall Street connections. The stablecoin, therefore, serves as a scalable financial tool for AI developers and startups, enabling them to access capital without the need for conventional financial intermediaries [3].

To date, USD.AI has achieved $62 million in total value locked (TVL), indicating significant traction within the DeFi space. The protocol has also formed partnerships with several lending platforms, including K3 Capital, Concrete, Euler, and Pendle, which provide liquidity and support to the USD.AI ecosystem. Dana Hou, an Investment Partner at YZi Labs, emphasized the firm’s focus on backing projects that connect blockchain infrastructure with real-world applications. The investment represents a broader trend of DeFi protocols seeking to tokenize tangible assets to enhance liquidity and accessibility [3].

Users interested in participating in the USD.AI ecosystem can engage through a points-based campaign known as “Allo.” The program offers two yield farming strategies—Basic and Advanced—each with different return potentials. The Basic strategy provides a 6% annual yield with 2x Allo points per day, while the Advanced strategy offers a higher 16% annual yield and 10x Allo points. These strategies are designed to encourage early participation and reward community engagement, with a referral system adding an additional 10% boost to users' yields [2].

The USD.AI stablecoin is currently available on decentralized exchanges such as Curve (Arbitrum), where it has recorded a trading volume of $984,961.17 in the last 24 hours. Market data shows that USD.AI is ranked 765 on CoinGecko, with a market capitalization of BTC466.5860 and a fully diluted valuation of BTC466.5811. The token’s circulating supply is 53 million, and its price has fluctuated within a range of BTC0.058030 to BTC0.059387 [1].

Despite the promising growth metrics, the model introduces unique risks due to the volatility of AI hardware valuation. Unlike traditional stablecoins backed by fiat or crypto assets, USD.AI’s value is derived from the rapidly evolving AI computing landscape. This includes factors such as hardware depreciation, technological obsolescence, and market demand shifts. Therefore, while the model offers an innovative approach to collateralizing AI infrastructure, it also presents challenges in maintaining stable value over the long term. Analysts suggest that the success of USD.AI will depend on its ability to manage these risks while scaling its lending and yield-generating capabilities [3].

Source: [1] USDAI Live Price Chart, Market Cap & News Today (https://www.coingecko.com/en/coins/usdai) [2] Potential USD.AI Airdrop » How to be eligible? (https://airdrops.io/usd-ai/) [3] YZi Labs invests in USD.AI stablecoin, backed by AI ... (https://crypto.news/yzi-labs-invests-in-usd-ai-stablecoin-backed-by-ai-hardware/)