What is PAXG? PAX Gold (PAXG) is a stablecoin built on the ERC-20 protocol that is backed by physical gold reserves. Let's take a closer look.
What is PAX Gold (PAXG)?
PAX Gold (PAXG) is a stablecoin built on the ERC-20 protocol that is backed by physical gold reserves. The Paxos Trust Company holds the gold in custody, with each PAX Gold token representing one troy ounce of a 400-ounce London Good Delivery Gold bar stored in secure vaults, such as Brink's. As PAXG is backed by physical gold, its value is directly linked to the real-time market value of gold.
PAXG is regulated and approved by the New York State Department of Financial Services. To ensure the maintenance of reserves, a third-party auditing firm conducts monthly checks to verify that the gold reserve matches the supply of PAXG tokens. These attestation reports are publicly available on the Paxos' official website. The developers of PAXG also conduct regular audits of the smart contracts to identify any potential bugs or vulnerabilities.
Furthermore, all customer assets, including PAXG, are held separately from company assets, providing protection from bankruptcy.
How Does PAX Gold Work?
PAX Gold runs on the Ethereum blockchain, utilizing the smart contract functionality of the network for its transactions.
Paxos charges a small fee (around 0.02%) for creating and redeeming PAXG tokens. Additionally, users incur on-chain fees when moving the tokens on the Ethereum network.
Paxos actively monitors and investigates PAXG transactions using third-party analytical tools to detect and address potential instances of fraud and money laundering.
Regular smart contract audits are also conducted to ensure the code's integrity and identify any potential vulnerabilities.
Why Does PAXG Have Value?
PAXG derives its value from its ability to provide cryptocurrency investors with exposure to the price of gold. Investors are attracted to the idea of holding value in an asset they believe in the long-term while benefiting from the advantages of cryptocurrency, such as easy online exchange, portability, and transferability.
What is PAXG? Why Does PAX Gold Have Value? - Hopefully, this article can help you to get some knowledge.
