Robert has reported for a variety of international publications including the Associated Press, The Guardian, Vice, and Decrypt. Current areas of interest include the political economy of technology, cryptocurrencies, and privacy. Robert has a Bachelor of Science from UCL, and a Master's degree from the University of Oxford's Internet Institute.
What is PAXG?
Pax Gold, or PAXG, is a stablecoin backed by real gold bars.
A stablecoin is a cryptocurrency pegged to the price of another currency or commodity. Stablecoins are useful for guarding against the volatility of other cryptocurrencies, such as bitcoin or ETH, without going through the expense and hassle of leaving the crypto ecosystem entirely.
Each PAXG token is backed by a fine troy ounce of a 400-ounce London Good Delivery gold bullion bar. The Paxos Trust Company, PAXG’s issuer, stores the gold bars that back PAXG in vaults owned by the security company Brink’s. Holders can redeem their PAXG token with Paxos for physical gold bars at any time, or trade them in for U.S. dollars at the market price of a gold bar.
Paxos launched the PAXG token in 2019. It’s based on the Ethereum blockchain and trades as an ERC-20 token, meaning it can be transferred to any Ethereum wallet.
As of May 2022, PAXG had a market cap of $610 million, making it the largest gold stablecoin.
What can you do with PAXG?
PAXG’s primary purpose is to expose its holders to the price of gold.
Since the token is based on the Ethereum blockchain, holders can also stake the token — temporarily lock it up to earn crypto-based rewards — within DeFi smart contracts or with cryptocurrency companies. A crypto lending company called Nexo, for instance, pays up to 8% a year on PAXG deposits.
How can you buy PAXG?
You can buy PAXG on cryptocurrency exchanges, brokerages, and decentralized exchanges.
Crypto exchanges let you buy PAXG for cryptocurrencies or fiat currencies, such as the Canadian dollar. Wealthsimple Crypto requires CAD to buy PAXG. You’ll need to sign up for an account, show some ID, and then buy the cryptocurrency after making sure you have the appropriate funds in your account.
Centralized cryptocurrency exchanges let you trade PAXG directly with other users and place more advanced trades. Limit trades, for instance, let you buy or sell PAXG after the price reaches a certain price.
Decentralized exchanges such as Uniswap let you buy or sell PAXG from vast pools of coin pairings provided by other users. These exchanges run entirely on code and are based on blockchains. You can’t use fiat currencies on them.
To use a decentralized exchange, you need to connect a Web3 wallet, like MetaMask, then fill it with the currency with which you plan to buy PAXG, plus a currency to pay for transaction fees. If the decentralized exchange is based on Ethereum, that’ll be ETH.
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