One of the oldest and most widely used types of money is gold. Even in today’s age of decentralised digital bitcoin and other technical breakthroughs, gold has remained as prominent as ever. The majority of private investors still find it difficult and expensive to purchase gold. PAX Gold is one cryptocurrency business attempting to change this. The goal of PAX Gold is to democratise gold ownership and increase accessibility for regular investors. With 318,000 shares in circulation and a price of $1,937, PAXG has a market cap of $616 million.
What Exactly is PAX Gold?
A gold-backed cryptocurrency called PAX Gold gives investors digital ownership over physical gold. The initiative allows investors to exchange their PAXG tokens for gold, with each token being exchangeable for one fine troy ounce of actual gold, rather than only giving them exposure to gold prices. Additionally, PAXG tokens can be exchanged for fiat money or other cryptocurrencies.
By removing the onerous procedure of keeping, protecting, and transferring actual gold,It makes it simple for investors to possess gold. Due to the project’s fractional structure, investors can purchase partial shares of gold, which lowers the barrier to entry for ordinary investors posed by gold’s high price.
Many of the problems facing the modern gold market can be resolved by it by fusing actual gold ownership with the speed and portability of cryptocurrencies.
The Function of PAX Gold
An ERC-20 token called PAX Gold was created on the Ethereum blockchain. This allows the PAXG token to be portable across the vast network of wallets, exchanges, DeFi platforms, and other services on the Ethereum blockchain.
Staked, traded, or redeemed tokens can be exchanged for actual gold. Gold bars approved by the London Bullion Market Association are some of the highest quality gold available on the market that is actual gold. The world’s safest gold vaults are then used to store these gold bars.
Unexpectedly, PAX Gold does not impose any custodial or storage fees despite the superior quality of the gold and storage. The only fee levied is a 0.02% transaction fee.
Beyond the gold, it also seeks to function in a transparent and reliable manner. The New York Department of Financial Services formally regulates both PAX Gold and its parent organization, Paxos Trust. Additionally, PAX Gold segregates the assets of the client from those of the business, safeguarding the client in the case of Paxos’ bankruptcy. Investors are given additional security and comfort by PAC Gold’s policies and rules.
The simplicity of use is the last distinctive feature of PAX Gold. To purchase, redeem, trade, or stake PAXG is really simple. PAX Gold does not intend to discourage redemption through establishing a complex redemption process. This user-friendliness has been essential in enabling it to fulfil its goal of democratising gold ownership.
Who Is Behind PAX Gold?
PAX Gold was founded by the Paxos Trust Business, a New York–based financial institution and IT Company specialised in blockchain technology. Charles Cascarilla, a former analyst at Goldman Sachs, and Richard Teo, a former analyst at Cedar Hill Capital Partners, created Paxos in 2012.
Not Paxos’ first foray at cryptocurrency, PAX Gold. Other cryptocurrency initiatives developed by Paxos include the stablecoin and digital dollar PAX Dollar (USDP). Strong institutional backing has been provided for Paxos, which has raised more than $500 million in total capital from investors including PayPal Ventures, Mithril Partners, and OakHC/FT.
Is Pax Gold Real Gold
As was already explained, Pax gold is tokenized gold that runs on the blockchain. Tokenization is the conversion of tangible and intangible assets into cryptocurrency through digital means. The Paxos trust company’s physical gold is precisely represented by the PAXG token. Because gold maintains its value over time, it makes a good store of value. As a result, it’s frequently used as an inflation hedge. Gold costs more in USD when the USD declines in value, and vice versa. Because of this, gold is a well-liked option for investors who want to shield their money against inflation.
The serial numbers on the PAXG tokens correspond to those on distinct gold bars. By entering a person’s Ethereum wallet address into the PAXG lookup tool, it is possible to learn the serial number, value, and other details about their physical gold holdings. They can also exchange their PAXG for another cryptocurrency, fiat money, or allocated or unallocated gold bullion bars at the current gold price.
Main Features of Pax Gold
The Ethereum-based ERC20 token PAXG can be moved or traded around-the-clock from any location. Anyone can participate in a London Good Delivery gold bar thanks to the low investment thresholds.
The New York state Department of Financial Services regulates Paxos as a custodian and trust corporation. Additionally, the allocated gold stored in the safest vaults in the world is fully backed by the PAX Gold token. A nationally recognised auditor confirms that the monthly supply of PAXG and underlying gold is equal.
The first and only gold token that can be exchanged for Good Delivery gold bullion bars that have LBMA accreditation is PAX Gold. Through a network of physical gold retailers, smaller amounts can also be conveniently redeemed. Paxos users can always redeem PAXG for USD at current gold market pricing. Customers with institutional accounts can also exchange their PAXG tokens for unused Loco London Gold.
Holders of PAXG can quickly exchange their PAXG for fiat currency, actual gold, or unallocated gold using the Paxos platform. PAXG can be used wherever ERC20 tokens are supported. On well-known cryptocurrency exchanges, PAX Gold tokens can also be exchanged for other digital assets.
For the generation and redemption of PAXG tokens in the Paxos wallet, Paxos offers an incredibly low fee structure (0.03-1% based on volume levels). Additionally, it provides free storage and cheap (0.02%) on-chain Ethereum transaction fees. On-chain transactions are subject to minimal Ethereum gas fees, just like with other ERC20 tokens.
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