#PAX Gold (PAXG) is an ERC-20 token on Ethereum, where 1 token = 1 troy ounce of physical gold of the London Good Delivery standard, stored in vaults like Brink’s, under the supervision of Paxos Trust Company.
Reliability and regulation
Paxos is a licensed organization under the supervision of the New York State Department of Financial Services, ensuring legal transparency.
Monthly third-party audits are conducted, publishing data on full compliance of the tokens with actual gold reserves.
Each token has a serial number of the corresponding bullion, available through a lookup tool (but not on the blockchain).
⚙️ How does PAXG work?
No need to store or transport gold — the token is convenient, divisible (up to 18 decimal places), and tradable like crypto.
Fee: 0.02% for Mint/Burn + ETH gas. No fee for storing gold.
Possible conversion to physical gold (minimum ~430 PAXG), fiat, or other assets.
📈 Market metrics
The PAXG market is estimated at around $600–700 million in capitalization, with hundreds of thousands of tokens in circulation and daily trades in the tens of millions of dollars.
During geopolitical tensions (April 2024), the price of PAXG surged to ~$2,900, showing its status as a 'safe-haven' asset.
Even during SEC pressure in 2023, PAXG remained more stable than many other tokens.
Advantages and risks
✅ Advantages:
Direct ownership of gold, not a credit-financial product like an ETF.
Operational trading, high liquidity, and accessibility of DeFi solutions.
Transparency: linked to real bullion, regular audits, ease of verification.
⚠️ Risks:
Non-functional Chainlink feed and discrepancies in the number of tokens have drawn criticism: a gap of ~25,500 ounces of gold that were not backed by reserves was found in the past.
Some users note that you do not physically hold gold — rather, you use a delegated model trusting Paxos.
Ethereum gas fees can be significant — especially when transferring large amounts or making transfers between wallets.
Psycho-economic perspective
PAXG can be viewed as a digital tradition: it combines the psychological comfort of owning gold with the agility of the crypto world. It suits people who seek to preserve a portion of capital in stable assets while wanting flexibility and integration into DeFi.
For those looking for a quick trade or hype — PAXG is unlikely to provide an emotional 'surge'. However, for investors who value stability and transparency — this might be exactly what they need.
Brief summary
Aspect/ Rating
Regulation/ Strong (NYDFS, Paxos) Gold backing 1 PAXG = 1 ounce of physical gold
Liquidity/ High (support for ERC-20, DeFi integrations)
Transparency/ Audits + lookup tool Risks Counterparty, technical, Ethereum gas
Conclusion
PAXG is not about quick profits, but about reliable preservation and stability in the digital age. If your goal is to hedge against inflation or move into something more stable, yet still integrated into the crypto ecosystem — PAXG could be a good choice. However, pay close attention to technical details and make informed decisions: check reserves, review audits, and be prepared for Ethereum fees.
Author: Taras (Tar_Agustin Dolney tDYC)
*Psycho-economic approach to tokens: here — gold. There — blockchain.*
