An ERC-20 stablecoin called PAX Gold (PAXG) is backed by actual gold reserves kept in safe vaults in London. By enabling customers to possess fractions of actual gold without having to pay for storage or shipment, PAXG lowers the barrier to entry for the gold investing market. Digital assets such as PAXG may be traded by users on DEXs and controlled crypto exchanges.
Introduction
For thousands of years, gold has remained a valued commodity. It is employed to create jewellery, preserve value, and even act as an inflation hedge. However, for the typical retail investor, purchasing actual gold may be expensive and time-consuming. One is that gold must be kept in a secure area, like a bank vault. Additionally, due to its enormous weight, moving gold from one place to another can be a challenging process.
With PAX Gold (PAXG), a tokenized form of gold that resides on the blockchain, Paxos Trust Company hopes to overcome these issues.
What is PAX Gold (PAXG)?
The Paxos Trust Company is the custodian of the ERC-20 stablecoin PAX Gold (PAXG), which is backed by actual gold reserves. In protected gold vaults like Brink’s, each PAX Gold token is equivalent to one troy ounce of a 400-ounce London Good Delivery gold bar. Because PAXG represents actual gold, its value is closely correlated with the current market price of that actual gold.
The New York State Department of Financial Services oversees and approves PAXG. A third-party auditing company conducts monthly audits to confirm that Paxos’ gold reserve matches the supply of PAXG tokens in order to ensure that Paxos maintains its reserves. These attestation reports are published on Paxos’ official website. The creators of PAXG regularly examine smart contracts for any flaws and vulnerabilities.
All assets owned by Paxos customers, including PAXG, are also shielded from bankruptcy and kept outside from corporate assets.
How does PAXG work?
On the Ethereum blockchain, PAX Gold functions. As an ERC-20 token, PAXG may be used with wallets that are based on Ethereum, linked with DEXs and DeFi DApps on Ethereum, and traded on exchanges like Binance.
Holding PAXG has fewer costs associated with it than owning actual gold bars, such as vault storage or custody costs. Only 0.02% in transaction fees and some ETH are charged as gas fees for each PAXG transaction. By enabling customers to own portions of actual gold bars without having to pay fees or incur storage or transit charges, it reduces the entrance barrier to the gold investing market.
Serial numbers for PAXG tokens are assigned to correspond with those for individual gold bars. Holders may use the PAXG lookup tool to determine the serial number, value, and other details of their physical gold by inputting their Ethereum wallet address. Additionally, at any moment, they may exchange their PAXG for fiat money, another cryptocurrency, or allocated and unallocated gold bullion bars from gold dealers at the going rate for the precious metal.
What’s the difference between PAXG and gold ETFs?
Exchange-traded funds (ETFs) for gold follow the price of the underlying metal. Only the price of gold is exposed to investors; ownership of the metal is not. A party to a contract representing the right to a certain share of the pooled gold is an investor who owns shares of a gold ETF. ETFs for gold cannot replace complete ownership of the metal. For instance, during periods of uncertainty and crisis, the contract value may be less at settlement than the actual worth of the gold it represents.
PAXG is a digital depiction of gold, in comparison. Each PAXG token stands in for one fine troy ounce of gold that is stored in safe, serial-numbered vaults in London. Exchanging PAXG doesn’t require days to settle as trading actual gold bars would. Since PAXG is an ERC-20 token on Ethereum, it can be exchanged and settled almost instantly.
How to buy PAXG on Binance?
You can buy PAX Gold (PAXG) on crypto exchanges like Binance.
Click [Trade] – [Spot] after signing into your Binance account.
- Type “PAXG” into the search bar to see the trading pairings that are accessible, such as PAXG/BUSD, PAXG/USDT, PAXG/BNB, and PAXG/BTC.
- Enter the quantity of PAXG you wish to purchase in the [Spot] box. For this illustration, we’ll utilise a Market order. The bought PAXG will be credited to your Spot Wallet after you click [Buy PAXG].
Closing thoughts
Physical commodities continue to be a major component of conventional investors’ portfolios, despite the growth of numerous cryptocurrency investing choices in recent years. By harnessing the speed and liquidity of crypto assets, PAXG hopes to provide a blockchain-based alternative to this established market.
