What Is PAX Gold (PAXG)? How does PAXG work?

Join Camnang24h to learn about the project “What Is PAX Gold (PAXG)? How does PAXG work? Who Are the Founders of Pax Gold? What’s the difference between PAXG and gold ETFs? ” through the article below. PAX Gold (PAXG) is an ERC-20 stablecoin backed by physical gold reserves in secured London vaults. PAXG lowers the entry barrier to gold investment by allowing users to own fractions of physical gold without the burden of storage and transportation fees. Users can trade PAXG as a digital asset on centralized crypto exchanges and DEXs. 

Related: What Is UMA (UMA)?

What Is PAX Gold (PAXG)?

Introduction

Gold has maintained its status as a valuable commodity for thousands of years. It’s used to make jewelry, store value, and even hedge against inflation. However, buying physical gold can be expensive and cumbersome for the average retail investor. For one, storing gold requires a safe location, such as a bank vault. Moreover, transporting gold from one location to another can be a complex task due to its heavy weight.

Paxos Trust Company aims to address these challenges with PAX Gold (PAXG) — tokenized gold that lives on the blockchain.

What is PAX Gold (PAXG)?

PAX Gold (PAXG) is an ERC-20 stablecoin backed by physical gold reserves, held in custody by the Paxos Trust Company. Each PAX Gold token equals one troy ounce of a 400-ounce London Good Delivery gold bar housed in secured gold vaults, such as Brink’s. Since PAXG represents physical gold, its value is tied directly to the real-time market value of that physical gold.

PAXG is regulated and approved by the New York State Department of Financial Services. To ensure that Paxos maintains its reserves, a third-party auditing firm performs monthly checks to verify that Paxos’ gold reserve matches the supply of PAXG tokens, and these attestation reports are released on Paxos’ official website. PAXG’s developers conduct regular smart contract audits to identify potential bugs and vulnerabilities.

In addition, all Paxos customers’ assets, including PAXG, are protected from bankruptcy and held separately from company assets.

What is the price of PAX Gold (PAXG) today?

In this section one can follow the price and chart of PAX Gold (PAXG) traded today via the chart below. If you want to know where to buy PAX Gold (PAXG) at current rates, the top crypto exchanges to trade PAX Gold (PAXG) securities are currently Binance, MEXC, Bitrue, Tapbit, and Bitget.

 


Who Are the Founders of Pax Gold?

Charles Cascarilla is the founder and chief executive officer of both Paxos Standard and Pax Gold. Cascarilla has an extensive career in capital management, which is what led him to explore the vast possibilities cryptocurrencies offer.

After acquiring a degree in finance from the University of Notre Dame, he co-founded Cedar Hill Capital Partners in 2005. This was the start of his career in finance and capital management. Since 2005, Mr. Cascarilla has participated in several traditional and blockchain-based venture capital projects.

What Makes Pax Gold Unique?

With a growing number of ERC-20 tokens available for purchase, Pax Gold stands out because it is backed by an already established commodity. One of the main goals for Pax Gold is to make investing in gold more accessible.

The official whitepaper states that “more than USD 3.5 trillion of the total gold available today is used solely for investment purposes;” however, a large portion of it is unavailable to small-time investors. This is where Pax Gold comes into play. Each PAXG token is backed by a fraction of a piece of London Good Delivery gold bar, stored in Brink’s gold vaults, which is the approved storage company by the London Bullion Market Association.

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.

How does PAXG work?

PAX Gold runs on the Ethereum blockchain. As an ERC-20 token, PAXG is compatible with Ethereum-based wallets, can be integrated with DeFi DApps and DEXs on Ethereum, and can be traded on cryptocurrency exchanges like Binance.

Compared to owning physical gold bars, owning PAXG doesn’t require any vault storage or custody fees. Each PAXG transaction only incurs a small transaction fee of 0.02% and some ETH as gas fees. It lowers the entry barrier to gold investment by letting users own fractions of physical gold bars without the burden of fees, storage, or transportation costs.

PAXG tokens are allocated serial numbers that match those of individual gold bars. Holders can find their physical gold’s serial number, value, and other characteristics by entering their Ethereum wallet address on the PAXG lookup tool. They can also redeem their PAXG anytime for fiat currency, another crypto asset, or allocated and unallocated gold bullion bars from gold retailers at the current market price of gold.

What’s the difference between PAXG and gold ETFs?

Gold exchange-traded funds (ETFs) track the value of the underlying gold. They only give investors exposure to the price of gold, but not the ownership of it. An investor in possession of a gold ETF shares is a party in a contract that represents the entitlement to a specific percentage of the pooled gold. Gold ETFs cannot substitute for full ownership of gold. For example, in times of crisis and volatility, the contract value could be lower than the underlying value of the gold it represents by the time of settlement.

PAXG, in contrast, is a digital representation of gold. Each PAXG token represents one fine troy ounce of gold housed in secured London vaults that can be identified by serial numbers. Trading PAXG doesn’t take days to settle as could be the case when trading physical gold bars. As PAXG exists on Ethereum as a ERC-20 token, PAXG can be traded with a near-instant settlement.

How to buy PAXG on Binance?

You can buy PAX Gold (PAXG) on crypto exchanges like Binance.

1. Log in to your Binance account and click [Trade] – [Spot].

2. Search “PAXG” to see the available trading pairs, including PAXG/BUSD, PAXG/USDT, PAXG/BNB, and PAXG/BTC.

3. Go to the [Spot] box and enter the amount of PAXG to buy. In this example, we will use a Market order. Click [Buy PAXG], and the purchased PAXG will be credited to your Spot Wallet.

Closing thoughts

While various crypto investment options have gained popularity in recent years, physical commodities are still common in traditional investors’ portfolios. PAXG is looking to offer a blockchain-powered alternative to this established market by utilizing the speed and liquidity of crypto assets.

Disclaimer: Any information provided here including featured projects should not be considered investment or financial advice. Information is provided as-is without warranties. We cannot verify the claims or reliability of the projects listed. By using this information, Camnang24h only wants to provide information for your reference before deciding to invest, not advice. Self-study!

Source: Binance.com

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