Pax Gold (PAXG) is a stablecoin that is theoretically backed by one fine troy ounce of gold. Hence, Pax Gold is an attempt to create an alternative to fiat currency by offering a gold-backed stablecoin.
To explain Pax Gold is an ERC-20 (Ethereum request for comment) token. Each PAXG token contains a smart contract that confers ownership in an ounce of troy gold. The smart contract is a decentralized app (dapp) that sells the gold when you spend or sell a PAXG token.
Each Pax Gold holder owns a troy ounce of an LBMA-accredited London Gold Delivery gold bar kept in a Brinks vault in England. The London Bullion Market Association (LBMA) is the organization that verifies gold in the United Kingdom. Pax Gold Holders can look up the serial number and information about the gold by entering an Ethereum address.
To explain, you purchase unallocated or allocated London Goods Delivery golds bars. To elaborate, unallocated gold bars have no ownership, while allocated gold bars have owners. Instead, people who buy unallocated gold get a right to a share of a gold bar.
What is Pax Gold (PAXG)?
Hence, you can theoretically redeem Pax Gold (PAXG) for London Good delivery bars. Users can convert or redeem PAXG for physical or unallocated gold through the Paxos platform. Additionally, they claim you can redeem PAXG for US dollars at current gold market prices.
They claim Pax Gold offers low transaction-fees and zero storage fees. However, they charge Ethereum Gas fees for on-chain transactions.
Paxos, a trust company and custodian, built Pax Gold (PAXG). The New York State Department of Financial Services regulates Paxos. Auditors will verify Paxos’ gold supply.
What Value Does Pax Gold (PAXG) offer?
Interestingly, Pax Gold’s price is close to the market price for a troy ounce of gold. For example, on 14 September 2022, GoldPrice gave a troy ounce of gold a $1,696.83 price.
Conversely, CoinMarketCap gave Pax Gold (PAXG) a $1,689.89 Coin Price on 14 September 2022. Hence, Pax Gold Price is lower than the gold price. Additionally, CoinMarketCap gave Pax Gold a $549.569 million Market Cap, a Fully Diluted Market Cap of $549.611 million, and an $11.887 million 24-Hour Market Volume on 14 September 2022. They base those numbers on a Circulating Supply of 325,209.48 PAXG and a Total Supply of 325,209 PAXG.
Mr. Market’s interest in PAXG is strong. Pax Gold was CoinMarketCap’s 70th largest cryptocurrency on 14 September 2022.
Pax Gold (PAXG) vs Tether Gold (AUXT)
In contrast, CoinGecko gave Pax Gold (PAXG) a $1,688.46 Coin Price, a $549.100 million Market Capitalization, and a $7.846 million 24-Hour Trading Volume. They base numbers on a Circulating Supply of 325,209 million PAXG and a Total Supply of 325.209 million PAXG. Pax Gold was CoinGecko’s 82nd ranked stablecoin on 14 September 2022.
I consider Pax Gold (PAXG) an interesting digital asset with true value. However, I only recommend people who have extra income they do not need to spend buy PAXG. If you want a stable investment that could survive inflation and international turmoil, I think Pax Gold (PAXG) is worth examining.
However, I cannot see how Pax Gold is better than its competitor, Tether Gold (XAUT). Notably, CoinGecko gave Tether Gold (XAUT) a $1,709.13 Coin Price on 14 September 2022. Similarly, CoinMarketCap gave Tether Gold a $1,690.87 Coin Price on 14 September. Yet both gold-backed stablecoins could be excellent investments.