PAX Gold is an Ethereum-based stablecoin backed by physical gold. It was issued in 2018 by a blockchain company known as The Paxos Trust Company.^[1]

Backstory

PAX Gold was created by Paxos Trust Company in 2018. The Co founder and CEO Charles Cascarilla wanted to create digital currency backed by gold because holding physical gold is an outdated investment now a days. According to him, physical gold is harder to trade, divide or leverage against other investment assets. The PAX Gold is created to solve these fundamental issues while being fully regulated.^[2]

Founder

Founder Charles Cascarilla is a graduate of the University of Notre Dame, where he obtained a Bachelor of Business Administration (BBA) in Finance . He has a vast experience in the financial sector and worked for many Investment firms, including Cedar Hill Capital Partners and Liberty City Ventures. He founded Paxos in 2014 and since then he has been the CEO of the company.^[3]

Overview

PAXG is an ERC20 Token created using smart contracts deployed on Ethereum. It is a stablecoin pegged to real gold.   Every PAXG token issued is backed by an ounce of allocated gold stored in Brink's Gold Vaults in London. Anyone who owns PAXG owns the underlying physical gold, held in custody by Paxos Trust Company. PAXG holders have the ability to redeem the tokens for physical gold bars if they choose to.^[2]

In just a few months of its launch, Paxos Gold has received the support of dozens of blockchain platforms and saw a massive $5 million purchase from Nexo, a leading crypto lender. This purchase fueled an increase in PAXG’s market capitalization to over $10 million, currently around $34 million.^[3]

Features

Pax Gold has many advantages over physical or real gold and simplifies trading and transfer.^[1]

Accessibility

PAXG can easily be moved or traded anywhere in the world, 24/7 as compared to physical gold, which requires transportation and other necessary documentation to get fulfilled.^[3]

Regulations

PAXG is a custodial asset and can be redeemed for actual physical gold bars. PAXG is fully regulated by the New York State Department of Financial Services (NYDFS). It is also approved and regulated by the DFS and fully-backed by allocated gold held in the most secure, leading vaults in the world. Additionally, cryptocurrency custodian BitGo has announced its support for Paxos Gold Token.^[2]

Redeemable

PAXG is the only gold token that customers can redeem for LBMA -accredited Good Delivery gold bullion bars. Smaller amounts can be redeemed through a network of physical gold retailers around the world. Institutional customers can also redeem for unallocated Loco London Gold. Paxos customers can always redeem for United States dollar at current gold market prices.^[3]

Security

The PAX Gold smart contract is based upon the Paxos Standard smart contract which was audited by three third-party specialists (Nomic Labs, ChainSecurity, and Trail of Bits) in September-October 2018. In January 2019, Trail of Bits performed an additional audit for a potential upgrade to the PAX USD smart contract.^[2]

Low Fees and Flexibility

Anyone can convert or redeem PAXG for fiat, physical or unallocated gold via the Paxos platform. Trade PAXG against other digital assets on popular cryptocurrency exchanges. Extremely competitive fee structure for creation and redemption of PAXG tokens (0.03-1% based on volume tiers) in the Paxos wallet, low on-chain Ethereum transaction fees(GAS) (0.02%) for and zero storage fees.^[1]

MarketCap

PAXG is ranked 150th on CoinMarketCap and has A market capital of over $57,823,943 USD at the time of writing (August 2020). Its All Time High of was $3,487.68 USD (Apr 22, 2020) and All Time Low of $1,387.98 USD was registered on (Oct 26, 2019) . It is currently trading around $1,933.53 USD. It is currently listed on many centralized exchanges, including Kraken, Bithumb Global, ProBit Exchange Zebpay and HitBTC.  It is also available on Decentralized Exchanges (DEX) like Uniswap. DeFi.^[3]

Competition

PAX Gold is not the only gold-backed crypto token that's available to investors today. PAX Global competes with viable alternatives include Tether Gold and Digix Gold Token (DGX) Token. Just like PAX Gold, both of those tokens are also built on the Ethereum blockchain platform. There are other gold backen Token are also rising, which include Meld Gold by Algorand and Perth Mint Gold Token (PMGT).^[2]