PAXG solves a friction that has haunted gold investing for decades: you can own gold, or you can own tradable financial instruments — but physical gold bars are illiquid, storage-intensive, and transfer slowly. Paxos Trust Company, a regulated financial institution with a New York State Trust charter, purchases actual physical gold and deposits it in Brink’s vaults in London. It then mints PAXG tokens — each representing one fine troy ounce of allocated, numbered gold bars. PAXG holders actually own that specific gold: they can redeem tokens for delivery of physical gold or for fiat equivalent at live market prices. Because PAXG is an ERC-20 token, it trades 24/7 on crypto exchanges, can be transferred globally in minutes, earns no storage fees from Paxos (Paxos charges a 0.02% fee on creation/redemption), and can be used as collateral in DeFi protocols. It’s gold that thinks it’s a stablecoin.
| Stat | Value |
|---|---|
| Ticker | PAXG |
| Price | $4,823.93 |
| Market Cap | $2.38B |
| 24h Change | +0.1% |
| Circulating Supply | 493,649 PAXG |
| All-Time High | $5,619.09 |
| Contract (Ethereum) | 0x4580...af78 |
How It Works
1:1 gold backing:
Each PAXG token corresponds to one troy ounce of allocated gold bar(s) held in Brink’s London vaults. Paxos publishes monthly attestation reports by third-party auditors confirming the gold reserve matches outstanding PAXG supply.
Regulated issuance:
Paxos operates under New York State Department of Financial Services (NYDFS) oversight. PAXG holders have legal claims on the underlying gold — if Paxos became insolvent, gold segregation rules protect holders’ assets from creditors.
DeFi composability:
PAXG can be deposited in Aave, MakerDAO, and other protocols as collateral. This gives gold holders access to liquidity without selling — borrowing stablecoins against PAXG exposure.
Redemption options:
- Sell PAXG for USDP (Paxos stablecoin) or fiat
- Redeem for physical gold delivery (minimum quantity requirements apply)
- Redeem for unallocated gold credit
Tokenomics
| Metric | Value |
|---|---|
| Backing ratio | 1:1 (1 PAXG = 1 troy oz gold) |
| Supply | Dynamic — minted/burned on demand |
| Price tracking | Live gold spot price (XAU) |
| Fees | 0.02% on creation/redemption; no storage fees |
Use Cases
- Gold exposure in DeFi — Use gold as DeFi collateral without custodial ETFs or physical storage
- Global gold transfer — Transfer gold value globally in minutes vs. days for physical settlement
- Inflation hedge — On-chain gold exposure as portfolio diversification alongside crypto assets
- 24/7 gold trading — Trade gold on crypto exchanges around the clock vs. traditional market hours
History
- Sep 2019 — Paxos launches PAXG as the first regulated, physically-backed gold token on Ethereum
- 2020 — DeFi protocols integrate PAXG as collateral; gold price surge increases PAXG demand
- 2021–2022 — Inflation fears drive gold and PAXG interest; DeFi gold use cases expand
- 2023–2024 — PAXG established as the dominant gold-backed token; RWA narrative broadens interest
- Ongoing — Maintained as the benchmark gold token in the RWA/commodity-backed token space
Common Misconceptions
“PAXG is a stablecoin.” PAXG tracks gold prices, which fluctuate. It is a commodity token, not a fiat-pegged stablecoin — PAXG/USD prices rise and fall with the gold market.
“Holding PAXG on a crypto exchange means I own gold.” If PAXG is held on an exchange (not self-custodied in a wallet), you have exchange credit for PAXG — the actual gold backing applies to circulating PAXG in wallets, not exchange IOUs.