Swap PAXG at the Best Rate

What is PAXG?

PAXG is an asset backed token rather than a synthetic or an index. Paxos Trust Company holds LBMA accredited London Good Delivery bars with Brink's in London, and the token confers ownership of specific vaulted gold, allocated down to bar serial numbers. A lookup tool on the Paxos site shows the serial number, weight and characteristics of the gold behind any Ethereum address.

That design differs from most gold products. Exchange traded funds give exposure through shares, and unallocated accounts give a claim on a dealer's general stock, while PAXG is titled ownership of allocated metal with the transfer speed of an ERC-20 token. Because the backing is physical gold, the price follows the bullion market.

How PAXG works

Paxos mints PAXG when customers buy through its platform and burns it on redemption, with creation and destruction fees tiered by volume. Holders can convert to US dollars, to unallocated Loco London gold, or, above 430 PAXG, to whole physical bars; smaller physical amounts are available through partner gold retailers.

Verification is contractual and recurring: an independent accounting firm attests every month that the count of PAXG tokens in circulation matches the troy ounces held in custody, and the reports are published on the Paxos site. Paxos charges no storage fee; on-chain transfers carry a 0.02% Paxos fee plus normal Ethereum gas.

PAXG supply and tokenomics

Supply is elastic and fully collateralized: tokens exist only while corresponding gold sits in the vault, growing with purchases and shrinking with redemptions. There is no cap, no schedule and no team allocation. As a trust company product the gold is held bankruptcy remote, segregated from Paxos corporate assets.

Who builds PAXG

Paxos is a New York based regulated financial institution that also issues the USDP stablecoin and runs tokenization infrastructure for partners. The New York State Department of Financial Services approved PAX Gold before its launch on 5 September 2019, making it the first regulated gold token, and Paxos remains its sole issuer.

How PAXG is governed

PAXG has no token holder governance. Paxos controls issuance, redemption and fees, and the contract includes an asset protection role that can freeze an address or wipe a frozen balance when the law requires it, a power the whitepaper says is reserved for court orders and similar legal process.

What people use PAXG for

Most PAXG activity is people holding gold in a form that moves like a token, which opens uses that vaulted bars cannot serve directly.

• Holding fractional allocated gold without storage fees or a vault relationship.
• Trading gold against crypto assets around the clock.
• Posting gold as collateral in lending markets that accept ERC-20 tokens.
• Redeeming for dollars, unallocated gold or whole bars through Paxos.

PAXG risks and considerations

PAXG concentrates issuer and custodian risk in Paxos: the token is worth an ounce of gold only while the trust structure, the vault relationship and the redemption window keep functioning. The asset protection role means a balance can be frozen under legal order, which pure bearer assets do not allow.

The price tracks gold, so it moves with the bullion market and is not a stablecoin. Physical redemption requires 430 PAXG and onboarding with Paxos, on-chain transfers carry the 0.02% fee, and availability differs by jurisdiction depending on local rules.