22 minutes, 300 trillion dollars, a chain on illusion accelerates the heartbeat of the stablecoin market. At 3:12 AM on October 16, the Ethereum blockchain recorded an astonishing transaction: the stablecoin issuer Paxos minted 300 trillion PYUSD. This number is equivalent to more than twice the global GDP, enough to buy thousands of Apple companies.
Even more surprisingly, 22 minutes later, this astronomical stablecoin amount was completely destroyed. This sudden chain operation quickly ignited the cryptocurrency community, raising widespread doubts about the safety and reliability of stablecoins.
01 Flash Crash Incident Overview
● An address marked 'Paxos 7' on the Ethereum mainnet interacted with the PYUSD contract to complete a token minting transaction totaling up to 300 trillion PYUSD.
● This amount is almost beyond everyone's imagination, calculated at a 1:1 peg to the dollar, its value is equivalent to more than twice the total GDP of all countries in the world.
● Just 22 minutes later, this massive PYUSD was sent to an inaccessible burn address, completely disappearing from circulation. This brief on-chain 'currency creation' instantly became a hot topic in the cryptocurrency circle.
● Blockchain data shows that Paxos only paid $2.66 in gas fees for this, yet created tokens worth $300 trillion, highlighting the absurdity of the incident.
02 PYUSD Fundamental Analysis
PYUSD is a dollar-pegged stablecoin issued by global payment giant PayPal, managed and issued by Paxos Trust Company. As a fully collateralized stablecoin, PYUSD is pegged to the dollar at a 1:1 ratio, supported by dollar deposits, U.S. Treasury bonds, and other cash equivalents. Paxos also publishes certifications monthly to provide transparency and comply with U.S. regulatory standards.
Market Position and Growth Trajectory
As of June 2025, PYUSD has become the tenth largest stablecoin, with a market value exceeding $1 billion, more than doubling from a low point of $498 million at the beginning of 2025.
PYUSD had a market value of only $234 million at the beginning of 2024, but by August 27, its market value had surpassed the $1 billion mark. In just over seven months, PYUSD's market value grew by 327%, a very rapid growth rate.
This growth is mainly attributed to the high incentive strategy launched by PYUSD on the Solana public chain. In the Solana staking project Kamino, the staking annualized yield of PYUSD can even reach over 10%.
Category
Key Information
Specific Data/Sources
Notes/Sources
Market Value and Ranking
Market value exceeded $1 billion in June 2025
Approximately $1.01 billion
Doubled from a low point of about $498 million at the beginning of 2025
Current Stablecoin Market Ranking
Rank 6
According to DeFiLlama data
On-chain Distribution and Growth
Significant growth on the Solana chain
The share on Solana and Ethereum is approximately 65/35
Growth in 2025 is driven more by strategic initiatives from PayPal and its issuer Paxos.
DeFi Yield (Solana Ecosystem)
Kamino Main Market
Approximately 7% - 13.01% APY
Yield will fluctuate regularly
Drift Lending Vault
Approximately 10% APY
-
Drift Insurance Fund
Approximately 18.5% APY
High Risk
Save (formerly Solend) Main Pool
Approximately 12% APY
03 Market Response and Chain Effects
● According to Nansen data, PYUSD maintained its dollar peg after the incident, with a price drop of only about 0.5% for a brief period.
● The cryptocurrency community's reaction to this incident is mixed with shock, concern, and humor. Many observers pointed out that if these 300 trillion PYUSD continued to circulate, their total value would immediately exceed the global money supply by many times.
● The decentralized lending protocol Aave quickly responded by suspending PYUSD trading. Chaos Labs founder Omer Goldberg explained that this restriction is a 'temporary measure in response to unexpected large transactions'.
● Cryptocurrency security researcher yannickcrypto.eth pointed out that PayPal seemed to have 'added the decimal point twice' during minting, resulting in a $300 trillion error. He expressed concern about PYUSD's lack of a 'dashboard or multi-authentication mechanism' and compared it to the on-chain cap design of USDC.
04 Industry Background and Deep-seated Risks
This incident exposed potential vulnerabilities in the internal controls and security mechanisms of the stablecoin industry. Although Paxos quickly characterized the incident as an 'internal technical error', such a massive amount still raised market concerns about the internal controls of stablecoins.
● Currently, PYUSD ranks sixth in the stablecoin market, surpassing competitors such as USDD, TUSD, and FRAX.
● The total market value of stablecoins has now exceeded $238 billion, demonstrating their increasing use in trading, payments, and as on-chain cash equivalents.
● Unlike stablecoin issuers like Tether, PayPal is already a massive business empire in the Web2 world, with a global user base of 400 million, providing PYUSD with unique scalability advantages.
05 Regulation and Future Outlook
● When this 'flash crash' incident occurred, regulators were strengthening oversight of stablecoin accounting and reporting. According to new guidelines in the U.S., issuers must maintain real-time proof of reserves and implement strict controls over the creation and destruction of tokens.
● The New York Department of Financial Services (NYDFS) has been made aware of this matter and stated that it is in contact with Paxos and PayPal. This regulatory intervention could trigger stricter audit and control requirements for stablecoins.
● On the positive side, the resurgence of PYUSD in 2025 seems less reliant on ecosystem incentives and more on strategic growth initiatives from PayPal and its issuer Paxos Trust Company.
● In addition to consumer use, PYUSD has also made progress in corporate and institutional payments. In September 2024, PayPal completed its first corporate transaction using PYUSD, when Ernst & Young processed a cross-border payment through SAP's blockchain-supported enterprise system.
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