What Is Pax Gold (PAXG)?
Pax Gold (PAXG) is a gold-backed cryptocurrency, launched by the creators of Paxos Standard (PAX) in September 2019. As an ERC-20 token operating on the Ethereum blockchain, Pax Gold is tradeable on a large variety of exchanges and has become an accessible way for traders to start investing in gold.
The main goal behind Pax Gold is to make gold more tradable, as the physical commodity is not easily divisible or flexible in terms of transport. This is why Paxos Standard decided to create a cryptocurrency entirely backed by gold. According to the official whitepaper, Pax Gold was created to allow investors to buy indefinitely small amounts of gold through the cryptocurrency, thus virtually eliminating minimum buy limits for the commodity.
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.
Tokenomics
Pax Gold tokens have a one to one ratio with the gold storage backing it. This means that there is a PAXG coin for each ounce of gold in rotation covered by the Pax Gold protocol. In this sense, the amount of PAXG tokens in circulation changes frequently.
At the moment of writing, there are about 60,161 PAXG coins in circulation. However, the number of coins shifts almost by the minute as new investors are introduced, and Pax Gold increases the available gold supply for backing.
How Is the Pax Gold Network Secured?
In the official whitepaper, Pax Gold CEO Charles Cascarilla explains that the PAXG protocol is created entirely on the Ethereum blockchain and is secured by the proof-of-work (POW) model. However, PAXG is not exclusively tied to Ethereum and can be launched on other blockchains as well.
Proof-of-work protocols represent a classic approach to cryptocurrency mining, Bitcoin being the most prominent example. Ethereum has, however, recently begun its transition to the proof-of-stake (POS) model, aiming to reduce the resources necessary for token mining, among other things.
Where Can You Buy Pax Gold (PAXG)?
Pax Gold is an ERC-20 token, which means it can be bought on many established exchanges and can be stored in a wide variety of cryptocurrency wallets.
Some of the top recommended exchanges for trading Pax Gold are Binance, BitZ, FTX and Kraken.