What is PAX Gold (PAXG)? The largest digital asset backed by physical gold.

In recent years, non-fungible tokens (NFTs), cryptocurrencies, and other modern investment options have become popular. However, tangible commodities such as gold remain popular.

Gold is a commodity that has existed for thousands of years as a means of storing value and exchange, and still successful to this day. Even with the emergence of decentralized cryptocurrencies, gold has maintained its position. However, for most individual investors, owning gold can be difficult and out of reach. There is a cryptocurrency company called PAX Gold (PAXG), aiming to democratize and make gold ownership more accessible to ordinary investors by allowing them to trade it like any other cryptocurrency.

PAX Gold has found a way to combine cryptocurrency with physical gold assets, making it attractive to investors familiar with traditional options. This article will discuss PAX Gold (PAXG) and analyze how this cryptocurrency operates.

What is PAX Gold?

Paxos Gold is a type of cryptocurrency supported by real gold reserves by Paxos company, a for-profit company based in New York. Each PAXG token is linked to a 1:1 ratio with an ounce Troy (equivalent to 0.0283495 kg) of a London Good Delivery gold bar stored in Brinks vaults in London. The Paxos-supported cryptocurrency, PAXG, is backed by gold bars meeting the London Bullion Market Association (LBMA) standard and can be redeemed for real gold.

Investors in PAX Gold are exempted from the hassle of storing and protecting physical gold, as well as transporting it. In addition, shares can be purchased in fractions, making it more accessible to retail investors, who are often hindered by the high cost of gold. PAX Gold is proud to combine the characteristics of both physical gold ownership and cryptocurrency, providing a solution to many modern challenges in the gold market such as high costs, storage concerns, and lack of liquidity.

How does PAXG work?

Token PAX Gold is built on the Ethereum blockchain, enabling it to be portable between wallets, exchanges, decentralized financial (DeFi) platforms, and other Ethereum-based applications. PAX Gold allows users to trade, stake, or redeem their tokens for high-quality gold bars. These gold bars are certified by the London Bullion Market Association (LBMA) and stored in secure vaults around the world. Despite top-notch security measures and high-quality gold, PAX Gold does not charge custody or storage fees—only a 0.02% transaction fee is applied.

Is PAX Gold safe?

PAX Gold is not only certified to the gold standard but also operates reliably and transparently. Both PAX Gold and its parent company, Paxos Trust, are under the legal jurisdiction of the New York Department of Financial Services (NYDFS). Furthermore, PAX Gold independently protects consumers and the company's assets, ensuring that consumers are safe in the event of bankruptcy.

PAXG undergoes monthly audits by a third-party auditing firm to ensure its gold reserves match the token PAXG supply. The reports from these audits are published on the official Paxos website. In addition, PAXG developers regularly conduct smart contract audits to identify any potential network vulnerabilities or flaws.

Is Pax Gold real gold?

As mentioned earlier, Pax Gold is gold tokenized and operates on the blockchain network. Tokenization is the process of converting both physical and intangible assets into cryptocurrency. The PAXG token represents physical gold from Paxos Trust Company. Gold is a good store of value because it retains its value over time. Therefore, it is often used as a hedge against inflation. When the USD depreciates, gold becomes more expensive when measured in USD, and vice versa. This makes gold a popular choice for investors looking to protect their assets from inflation.

PAXG tokens have serial numbers that match individual gold bars. The serial number, value, and other characteristics of the physical gold that the owner can explore by entering their Ethereum wallet address into the PAXG lookup tool. They also have the option to convert their PAXG into fiat currency, other cryptocurrencies, or allocated and unallocated gold bars at the current market price of gold.

Who is behind PAX Gold?

Paxos Trust Company, a financial and technology organization based in New York City specializing in blockchain technology, has created PAX Gold. Both Charles Cascarilla and Richard Teo, both former analysts at different companies (Cascarilla at Goldman Sachs and Teo at Cedar Hill Capital Partners), founded Paxos in 2012.

PAX Gold is not the only cryptocurrency project that Paxos has undertaken. In addition to PAX Gold, they have also created PAX Dollar (USDP), a digital US dollar and stablecoin. They have received strong support from organizations and have raised a total of over 500 million dollars from investors such as OakHC/FT, Mithril Partners, and PayPal Ventures.

Conclusion

PAX Gold (PAXG) is a digital asset. Each token is backed by one troy ounce (t oz) of a London Good Delivery 400 oz bar, stored in the vaults of Brink. When you own PAXG, you own the underlying physical gold, held by Paxos Trust Company.