PAX Gold (PAXG) is a fully regulated stablecoin that is offered and operated by the Paxos Trust Company. PAX Gold seeks to combine the appreciation of gold with the efficiency of cryptocurrencies. The desire to combine these two industries has been on the mind of crypto users since the earliest days of the market. PAX Gold differs from the competition in its pro-relative stance and custodial vault. The project provides users with a stablecoin asset pegged to physical gold at a 1:1 ratio held in one of the largest vaults in the world.
What Problems Does PAX Gold (PAXG) Attempt to Fix?
Many of the key concerns that PAX Gold targets have plagued the market for years. For one, the network is one of only a select few cryptocurrency protocols listed as a gold custodian. Specifically, the network quells regulatory concerns and improves industry-level adoption. PAX Gold is both regulated by the New York State Department of Financial Services and approved and regulated by the DFS.
Transparency
PAX Gold provides a new level of transparency to the market. The token remains fully backed by gold bars that are directly tied to each token via a serial number. Token holders don’t just own a fungible piece of gold. They have fractional ownership over a exact bar of gold that they can reclaim when they wish.
As part of this strategy, the system provides a tool to look up the serial number and information about your gold. Additionally, the network conducts third-party audits all the time. The results of these audits are posted to the PAX Gold community which keeps all token holders in the loop.
Exclusivity
Another major issue that investors face is gatekeepers. It can be difficult to get your hands on accredited investments. In most instances, you need to hold at least $1 million in assets. PAX Gold provides anyone with the opportunity to own a fraction of an LBMA-accredited London Good Delivery gold bar.
Lack of Interoperability
Another concern that has hindered earlier gold coins is a lack of interoperability. A gold token is not helpful if there is nowhere you can use it or trade it. Users can trade PAXG for other cryptocurrencies on popular crypto exchanges securely. The token will operate on any ERC-20 compatible exchange.
Benefits of PAX Gold (PAXG)
There are many benefits that PAX Gold users gain. For one, the protocol provides a cost-efficient solution to gold ownership. For years owning gold reserves was nearly impossible for the average person. Just the security involved with storing and transporting raw gold is out of the spectrum of the average person. PAXG eliminates the drawbacks of gold and transforms it into a fungible, tradable, and divisible digital asset.
Instant Settlement
Another major reason why so many gold investors have made the switch to PAX Gold is the network’s near-instant settlement times. You can send the value of gold globally in a direct peer-to-peer manner in seconds. This frictionless alternative is a huge upgrade to the bulky cumbersome options available today.
More Inclusive
Since PAX Gold supports the fractional ownership of physical bars, it lowers the entry requirements for investors. The platform features a low $20 minimum purchase price which makes it far more affordable than traditional gold bar strategies.
Security
Of course, PAX Gold would be nothing if it was unable to remain secure. The protocol introduces a number of security protocols and audits to provide user protection. Notably, PAX Gold is fully backed by allocated gold held in one of the most recognizable vaults in the world currently.
Redeemable
Another vital aspect of the PAX Gold approach is the network’s user redemption programs. Anyone can convert or redeem PAXG for fiat, physical, or unallocated gold. This gold comes directly from the LBMA-accredited Good Delivery gold bullion bars assigned to the token. You can even redeem smaller amounts at local physical gold retailers. Notably, another option is to redeem the tokens for cash value.
Low Fees
The low fee structure integrated by PAX Gold provides an advantage to traders. Users enjoy zero storage fees and small transaction fees based on the amount sent. In comparison, these fees are smaller than traditional gold vault services that charge to cover the cost of maintaining the vault. Notably, users who conduct more transactions enjoy a lower fee structure.
How Does PAX Gold (PAXG) Work?
PAX Gold works by pegging the value of its tokens to one fine troy ounce of a London Good Delivery gold bar. Network users can utilize the platform’s wallet to keep their tokens safely stored. Notably, PAX Gold is an ERC-20 compatible token that lives on the Ethereum network. It leverages the world’s largest Dapp and DeFi ecosystem to provide users with more earning opportunities and confidence.
PAXG – CoinGecko
PAXG
PAXG is a gold-pegged stablecoin that operates as the main product for PAX Gold users. Interestingly, the total supply of gold supporting PAXG continuously changes. These changes are made to reflect any alterations in PAXG’s market capitalization.
History of PAX Gold (PAXG)
PAX Gold was founded in 2012. It is one of the longest successfully operating gold-pegged projects in the market today. The Tokens founders are listed as Charles Cascarilla and Rich Teo. The latest version of PAXG officially entered the market in September 2019.
Conclusion
PAX Gold is another example of innovative ways that crypto developers tokenize gold and gold-related assets. These projects provide an excellent alternative to fiat stablecoins because they eliminate inflationary risks. As such, you can expect to see more investors enter the PAX Gold ecosystem to escape the crushing inflation found in the fiat sector at this moment.
