NLP: PAX Gold (PAXG) is a digital token that is backed by physical gold reserves held in custody by Paxos Trust Company. Each PAXG token represents the equivalent of one troy ounce of a 400-ounce London Good Delivery gold bar held in secured vaults, such as Brink’s. The value of PAXG is directly linked to the current market value of the physical gold it represents.
Key Takeaways
- Pax Gold (PAXG) is a digital asset that is backed by one troy ounce of a London Good Delivery gold bar, stored in professional vault.
- It is an ERC-20 token built on the Ethereum blockchain, and it allows for the ownership of and trade in physical gold in a more convenient and efficient way than traditional methods.
- By holding Pax Gold, holders can gain exposure to the value of gold, and can easily buy, sell, or trade the asset using cryptocurrency exchanges and wallets.
- It also allows for a lower barrier of entry for investors who want to invest in gold and it can be used as collateral for loans or other financial transactions.
Paxos, the company behind the PAXG cryptocurrency, has taken steps to ensure the security and regulation of their token. The token is approved by the New York State Department of Financial Services and is regularly audited by a third-party firm to ensure that the gold reserve matches the supply of PAXG tokens. The results of these audits are made publicly available on the Paxos website. Additionally, the Paxos team conducts regular smart contract audits to identify any potential bugs or vulnerabilities. To provide further protection for customers, all assets including PAXG are held separately from company assets and are protected from bankruptcy.
How does PAX Gold work?
PAX Gold (PAXG) is a stablecoin built on the Ethereum blockchain, backed by physical gold reserves held in custody by the Paxos Trust Company. Each token represents one troy ounce of a London Good Delivery gold bar, and its value is tied to the real-time market value of that physical gold. The token allows for easy trading, staking, and redemption for high-quality gold bars that are accredited by the London Bullion Market Association, and stored in secure vaults around the world. PAX Gold doesn’t charge any custodial or storage fees, only a small 0.02% transaction fee.
PAXG is a regulated and approved digital gold token by the New York State Department of Financial Services. The token is backed by physical gold and its reserves are audited by a third-party firm on a monthly basis. The smart contract of PAXG is also regularly audited to ensure its security and transparency. Additionally, the assets of customers holding PAXG are protected and held separately from the company’s assets in case of bankruptcy.
PAXG ensures its transparency and integrity through regular audits. A third-party auditing firm conducts monthly checks to match the gold reserves with the supply of PAXG tokens and the results are made available on Paxos’ official website. Additionally, smart contract audits are performed regularly by PAXG’s development team to identify and address any potential security issues.
Pax Gold vs. Gold ETFs
The key distinction between a gold ETF and PAX Gold is the ownership of the underlying asset. An ETF provides exposure to the price of gold without the investor actually owning the physical metal, whereas each PAXG token represents a real, physical gold bar held in secure storage in London, with a 1:1 correlation between the token and the ounce of gold it represents.
Gold ETFs provide investors with exposure to the price of gold, rather than actual ownership of the metal. They involve an agreement where the investor holds a portion of the pooled gold. However, this type of investment is not the same as owning the gold outright, as the value of the contract may be lower at the time of settlement.
In contrast to a gold ETF, Pax Gold (PAXG) is a digital token that represents physical gold. Each PAXG token is backed by a real gold bar stored in London vaults, with each token being equivalent to one troy ounce of gold. This allows for faster and more efficient trading, as transactions are handled on the Ethereum blockchain as an ERC-20 token, as opposed to the traditional process of trading physical gold bars, which can take days to settle.
Investing in PAX Gold offers a unique opportunity for those who want to stay current with market trends while also achieving their personal investment goals. The combination of physical gold assets and digital crypto tokens allows for a well-rounded investment that benefits from the strengths of both traditional and modern investment options.
PAX Gold Development
PAX Gold is a digital asset created by the Paxos Trust Company, a New York-based financial institution and technology company that specializes in blockchain technology. The company was founded by Charles Cascarilla, a former analyst at Goldman Sachs and Richard Teo, a former analyst at Cedar Hill Capital Partners in 2012.
Paxos, the company behind PAX Gold, has also developed other crypto projects. One of these is PAX Dollar (USDP), a digital version of the United States dollar and a stablecoin. They have gained significant support from institutions and have raised over $500 million in funding from investors such as OakHC/FT, Mithril Partners, and PayPal Ventures.
PAX Gold FAQ
Who are the founders of PAX Gold?
Charles Cascarilla, the Founder and CEO of Paxos, is a seasoned financial professional with a background in capital management. He earned his degree in finance from the University of Notre Dame and went on to co-found Cedar Hill Capital Partners in 2005. Throughout his career, Cascarilla has been involved in various venture capital projects, both traditional and blockchain-based, which led him to explore the potential of cryptocurrencies and eventually founding Paxos, which includes the Pax Gold stablecoin.
Is Pax Gold real gold?
Pax Gold is a tokenized version of physical gold that utilizes blockchain technology. Tokenization involves converting physical or intangible assets into digital form, in this case, the PAXG token represents real gold held by the Paxos trust company. Gold has long been considered a store of value as its value tends to remain stable over time, making it a useful tool for hedging against inflation. As the value of the USD fluctuates, the value of gold in USD also changes, making it a popular investment choice for individuals looking to safeguard their wealth from inflationary pressures.
The PAX Gold token is linked to physical gold bars that are stored in secure vaults. Each token has a corresponding serial number that matches an individual gold bar, which can be verified using the PAX Gold lookup tool by inputting the holder’s Ethereum wallet address. Holders of PAXG have the flexibility to convert their tokens into cash, other cryptocurrencies or physical gold bullion at the current market price of gold.
What makes PAX Gold unique?
Pax Gold, or PAXG, is an ERC-20 stablecoin that is backed by physical gold reserves held in custody by the Paxos Trust Company. The unique aspect of PAXG is that it allows for more accessibility in investing in gold, as it is backed by real gold bars stored in secure vaults, such as Brink’s. This makes it stand out among other ERC-20 tokens and allows for easy conversion into fiat money, other cryptocurrencies, or allocated and unallocated gold bullion bars at the current market price of gold.
Through combining the security and liquidity offered by blockchain-based cryptocurrency, and the established name of gold as a physical commodity, Pax Gold brings a new investment opportunity to traders. PAXG has inspired other cryptocurrency developers to create gold-backed tokens as well.