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PayPal’s PYUSD gets DeFi yield powered by Backed’s real-world assets on Morpho

PYUSD users can now access yield powered by Backed’s tokenized real-world assets (RWAs) on Morpho Blue – this marks the first time the stablecoin has been added to a major lending market.

PYUSD, the regulated USD stablecoin issued by Paxos for PayPal, can now be deposited into a vault curated by Steakhouse Financial on Morpho’s new decentralized lending protocol, Morpho Blue.

Users get yield on their PYUSD by lending to users who take out loans. Steakhouse Financial has chosen to use the permissioned wrapped version of Backed’s tokenized T-Bill ETF bIB01 and Lido’s wstETH liquid staking tokens as the principal collateral assets of the vault.

PYUSD – A Regulated Stablecoin and a Serious Contender

This integration significantly strengthens the utility of PYUSD within the DeFi landscape, which has already become one of the top 10 stablecoins since its launch only a few months ago. Recently, PYUSD enabled Chainlink Price Feeds for reliable on-chain data, showing their commitment to developing PYUSD into a serious challenger stablecoin. This move further underscores PayPal’s commitment to fostering a vibrant and inclusive DeFi ecosystem. PYUSD is issued under New York State Department of Financial Services (NYDFS) supervision.

Dual-Engine Yield

The PYUSD vault is curated by Steakhouse Financial, a leading DeFi consultancy. The lenders who deposit PYUSD into the vault are exposed to the “Dual Engine”, an approach that combines traditional real-world yields with crypto yields to optimize returns across different market conditions.

Tokenized Real-World Assets

Backed’s bTokens track the value of an underlying real-world asset. Tokens are fully collateralized by the underlying assets and traded over the blockchain in compliance with the Swiss DLT act. Bringing these assets on-chain provides users with stable yields uncorrelated from the wider crypto market. bTokens are flexible, and can be both permissionless or permissioned depending on the use case.

Permissionless Lending Markets

Morpho Blue’s unique feature of allowing anyone to create lending markets with any assets has allowed it to break ground as the first lending platform to support PYUSD. This permissionless approach fosters innovation and empowers the community to drive the protocol’s growth, ensuring a dynamic and adaptable ecosystem for users.


“At Backed, we’re creating the most composable and interoperable tokenized real-world assets. We focus on providing best-in-class reliability for our investors, and are looking forward to seeing bToken’s increased adoption in new lending markets.” Adam Levi, Co-founder at Backed

“At Steakhouse Financial, we deeply believe in open and transparent finance and we work hard, together with leading projects, to bring about this vision. The Dual Engine strategy marks the beginning of delivering real-world yields and crypto yields to work for non-US investors in all market conditions.” – Sébastien Derivaux, Co-Founder at Steakhouse Financial

“At Morpho we believe protocols should do less to enable more. Morpho Blue is a remarkably simple protocol that facilitates lending of any asset. We are excited to see its permissionless market creation being used to support the adoption of PYUSD.” – Paul Frambot, Co-founder and CEO at Morpho Labs

About Backed

Swiss-based Backed brings real-world assets on-chain. Backed issues permissionless tokens that track the value of real-world assets and are fully collateralized by them, such as stocks or ETFs. Tokens are issued in compliance with the Swiss DLT Act.

Backed’s tokens are not offered, sold, or delivered within the United States, or for the account or benefit of U.S. Persons.

About Steakhouse Financial

Steakhouse Financial Limited is the leading web3-native DeFi consultancy, specializing in stablecoins, real-world assets and providing finance workstream contributions to leading DAOs such as MakerDAO, Lido DAO, ENS, and other protocols. 

About Morpho

Morpho is a decentralized lending protocol with over $1.5B in deposits. The latest version, Morpho Blue, is a simple and immutable primitive enabling efficient lending of any digital asset.