Stable Coins: Paxos (Crypto Academy Week 7 - Homework Post for @yohan2on)

A fiat-collateralized stablecoin, the Paxos Standard Token (PAX) is one of the three stablecoins approved by Wall Street regulators, together with GUSD and BUSD. PAX is another cryptocurrency with a 1:1 collateral with US Dollars, as it seeks to combine the stability and reliability of the US Dollar with the benefits of the digital currencies. They are issued on the Ethereum blockchain as ERC-20 tokens.

Paxos Network Team from Paxos website.

First founded in 2012, PAX was created by New York’s Paxos Trust Company, who also have offices in Singapore and London. They are the first regulated trust that was approved by the New York State Department of Financial Services (NYSDFS) to offer crypto products and services in 2015. Their board of directors have a former Federal Deposit Insurance Corporation (FDIC) chair and a former US Senator, while their co-founder and current CEO is Charles Cascarilla.

Paxos Locations from Paxos website.

By September 10, 2018, PAX was launched as a US Dollar backed stablecoin and, alongside Gemini, became the first virtual currency companies granted trust charter by the NYSDFS, enabling them to offer regulated services concerning virtual commodities and crypto-assets. With its goal to create a future where digital assets can be transferred anywhere and anytime, the Paxos Trust Standard officially began trading on September 27, 2018.

What makes PAXOS special?

It allows users to exchange US Dollars for the PAX. This is in line with their goal to stabilize blockchain technology with dollars.

PAX is regularly audited. To show transparency, their website is updated every month by the top firms that independently verify that the token is backed by the US dollar reserves.

They are protected by the FDIC. While they have their US dollars in US banks, this makes sure that they are protected by the FDIC insurance.

How is PAX made?

Once a person sends one US Dollar to Paxos, it goes to a Paxos regulated bank account, which eventually mints a new PAX token. Therefore, for every dollar that is deposited into the Paxos bank account, a new PAX token will be created. If the person decides to get their dollar back, they need to exchange the PAX token, which will then be removed from the total supply. With this system, they can be sure to have a PAX token in circulation for every dollar, as the PAX tokens are only created depending on the demand.

Use case GIF from TechReport blog.

Since it is a stablecoin, its main use is to be a stable store of value when doing exchanges. By doing so, crypto traders can trade and hold onto them in order to alleviate the volatility in their portfolios. It can also be used for crypto assets trade as well as payments and transfers.

In the future, PAX is being planned to be used for consumer payments. Enabling them to offer a stable store of value for countries that face currencies with very unpredictable volatility.

You can use an official Paxos account to buy and trade PAX with US dollars, or by using any crypto wallets that are ERC-20 token compatible.

Some articles online recommend these 3 ERC-20 compatible wallets:

• MEW Wallet
• Atomic Wallet
• Trust Wallet

Market list from Coinmarketcap.

Paxos Standard or PAX can be bought, sold, and traded on different cryptocurrency exchanges, some are (based on top trading volume):

• Binance
• Coinsbit
• DigiFinex
• Deepcoin
• VCC Exchange
• Hotbit
• & etc.

For the full list of exchanges and different PAX trading pairs, you can go to market sites like coinmarketcap or coingecko.

Yesh! That concludes my research on the cryptocurrency stable coin PAX from Paxos Network. Thanks to @yohan2on for an awesome topic, it was surely challenging to research on. Also to my brother @ljhaytorres for asking me to write on Steemit again. Tagging curators @steemcurator01 & @steemcurator02.

Images are from Paxos' official website. Headers were made by me using photo editing tools.