Paxos is a term used in computer science to describe a set of protocols that ensure algorithmic safety. The name was inspired by a hypothetical Paxos Island, Greece, legislative consensus system. The creators of Paxos Crypto were inspired by this idea, and they used the notion of computational consistency to aid them in developing a new stablecoin. So, What is Paxos Dollar exactly?
What is Paxos Dollar (PAX)?
Paxos Dollar is a digital currency that is pegged to the US dollar. It is issued by the Paxos Trust Company and is regulated by the New York State Department of Financial Services. Paxos Trust Company is a fiduciary and qualified custodian under NYDFS regulations.
Pax Dollar (USDP) is an ERC20 token that is built on the Ethereum blockchain. It is fully backed by the US dollar and can be redeemed 1:1 for USD. Pax Dollar is designed to provide a digital alternative to cash that is stable, fast, and easy to use.
Pax Dollar can be used to pay for goods and services or sent to other Paxos account holders. Paxos also offers a Paxos Standard Token (PAX) which is a digital asset that is redeemable 1:1 for USD.
Read more: TOP 10 Best ERC20 Coins To Trade & HODL In 2023: A Full Guidance Of Potential Crypto For Traders
Background of Pax Dollar
- The Pax Dollar cryptocurrency was created in 2018 by an organization called Paxos.
- Paxos is a financial technology company that specializes in providing blockchain-based solutions for businesses. The company’s flagship product is the Paxos Standard (PAX), a digital asset that is pegged to the US dollar.
- Paxos also offers a platform for buying, selling, and transferring assets, as well as a custodial service for storing digital assets.
- Paxos created PAXD to provide a more efficient way to transfer value between different fiat currencies. PAXD can be used to send or receive payments in any currency that is supported by the Paxos platform.
- Paxos is headquartered in New York City.
How Does Pax Dollar Work?
One of the main draws of USDP is how quickly it can be converted into other currencies, the US Dollar being the most significant. It enables owners of volatile cryptocurrencies the chance to exchange them for more stable ones that nevertheless have all the standard advantages of a DeFi token, such as speed and anonymity. In fact, there are numerous uses for USDP, and those who possess PAX dollars can:
- Rapid global transactional activity: Holders of USDP can exchange funds with any other or with any network that accepts PAX dollars almost instantly, 24 hours a day, 365 days a year. However, you can be liable to particular fees imposed by a third-party vendor or exchange depending on which network you choose to make a transaction.
- DeFi-accounting and verification: Users of the Paxos network have access to the PAX dollar accounting system, which among other things enables them to take part in transactional verification. Inherent systemic alterations and network changes are also up for vote. They have to promise a particular amount of their money in order to do so, and that money is then locked up, giving them a passive reward. A proof-of-stake (PoS) is what is used to protect the network.
What Problems Does Pax Dollar Solve?
The Pax Dollar is a new type of digital currency that solves many of the problems associated with traditional fiat currencies.
- For example, the Pax Dollar is not subject to inflationary pressures, as a central bank does not back it.
- Additionally, the Pax Dollar is not subject to the same regulatory scrutiny as traditional fiat currencies, meaning that it can be used for a variety of illegal activities without fear of reprisal.
- Finally, the Pax Dollar is not subject to the same volatility as traditional fiat currencies, meaning that it can be used as a stable store of value.
The Pax Dollar Team
Paxos Standard was created by Paxos, a New York-regulated financial institution. Led by CEO and Co-Founder Charles Cascarilla, the Paxos team consists of individuals from various backgrounds and experiences ranging from Wall Street to Silicon Valley.
Paxos Trust Company has partnerships in different fields such as:
- Exchanges: Binance, Huobi, etc.
- Trading Desks: OSL, QCP Capital, etc.
- Wallets: Coinomi, Blockchain, etc.
- Lending, Payments, Chains, and More: Celsius, Savvy, etc.
Basic Information About USDP?
- Token name: Pax Dollar Token
- Ticker: USDP
- Blockchain: Ethereum
- Token Standard: ERC-20
- Contract: 0x8E870D67F660D95d5be530380D0eC0bd388289E1
- Total supply: 860.27M
- Circulating Supply: 945,642,940.11 PAX
Read more: BEP2 vs BEP20 vs ERC20: Which Is The Best Choice For You 2023?
- Pax Dollar’s market cap is $862.15M
- 24-H trading volume: $945,948,267, Rank #51 on CoinMarketCap
How Is USDP Backed?
The whitepaper states that Paxos Standard, which trades under the ticker USDP, is a token backed 1:1 by USD deposits. The trust business Paxos, which is overseen by the New York State Department of Financial Services, is where the token can be purchased (NYDFS).
You can trade or redeem one PAX for one USD. The tokens are immediately eliminated from the supply on redemption. Only when the corresponding money are in custody do USDP tokens materialize.
To put it another way, Paxos Standard Token performs the function of a stablecoin, a category of cryptocurrencies that offers price stability and is backed by a reserve asset like USD. As a result, PAX provides both the advantages of blockchain technology and the security of conventional cash.
Types Of USDP On Blockchains
There are two types of PAX that can be found on the Ethereum blockchain. These include:
- ERC-20 PAX:ERC-20 PAX is a digital asset that is created on the Ethereum blockchain. This type of PAX can be bought and sold on exchanges that support
- ERC-721 PAX: ERC-721 PAX is a non-fungible token (NFT) that is created on the Ethereum blockchain. This type of PAX can be bought and sold on exchanges that support ERC-721 tokens.
How to Buy USDP Tokens?
The easiest way to buy USDP tokens is through Binance. You can find a detailed guide on how to buy Binance here.
After you have a Binance account and money in your wallet, you are ready to buy PAX tokens. Open up the Binance exchange and select “Buy with Credit Card” under the “Funds” tab.
Select the amount of PAX you want to buy and confirm the order.
Read more: Coinbase vs Binance: Which Crypto Exchange is Best?
How to Store PAX Coins?
PAX coins are stored in a digital wallet. The best way to store them is by using an official PAX wallet. There are two ways to do this: either through the Paxful website or through the Paxful app.
Once you have your account set up, you will be able to see your wallet address. This is the address that you will need to send your PAX coins to.
To do this, log into your account and go to the “Withdraw” page. From here, you will need to enter your wallet address and the amount of PAX coins that you want to send. Once you have done this, click on the “Withdraw” button and your coins will be sent to your wallet.
Read more: Best Crypto Wallets For Storing Coins In 2023: Hot Wallets & Cold Wallets
What Are The Risks Involving In USDP?
The main risk is the possibility that the value of the currency may fluctuate wildly, which could lead to investors losing money. There is also the possibility that the currency may not be widely accepted by merchants and exchanges, which could make it difficult to convert back into traditional currencies.
What If Pax Dollar Collapses?
If the PAX dollar collapsed, it would mean that the Paxos Trust Company, which issues the currency, would no longer be able to back it with U.S. dollars. This would likely lead to a loss of confidence in the currency and a sharp decline in its value.
Advantages and Disadvantages
PAX Dollar is a stablecoin that is backed by the US dollar. It is a digital asset that is designed to provide a stable and reliable store of value.
- The main advantage of PAX Dollar is that it is backed by the US dollar, which is one of the most stable currencies in the world. This means that PAX Dollar is less likely to be affected by volatility in the cryptocurrency markets.
- Another advantage of PAX Dollar is that it is designed to be used as a payment system. This means that it can be used to make purchases or send money to other people.
The main disadvantage of PAX Dollar is that there are still a small group of traders who know and trade USDP instead of USDC or USDT.
Read more: TOP 8 Best Stablecoins To Trade & HODL In 2023: A Full Guidance For Beginners
Why USDP instead of USD?
The PAX Dollar is a stablecoin that is pegged to the US dollar. This means that one PAX Dollar is always worth one US dollar. Using the PAX Dollar instead of USD helps to reduce volatility and makes it easier to send and receive payments.
How Does PAX Dollar Stay at $1?
Each PAX is backed by a dollar’s worth of the underlying asset. You will receive one dollar for each PAX you own when you redeem your PAX.
How to earn PAX dollar tokens?
The easiest way to earn PAX dollar tokens is to buy them on an exchange. You can also earn them by participating in the Paxos Standard Token airdrop.
Why is Pax Dollar popular?
There are a few reasons for Pax Dollar’s popularity:
- Pax Dollar is one of the most stable coins in the market.
- Pax Dollar has a low transaction fee.
- Pax Dollar is easy to use.
What can I buy with USDP?
The USDP cryptocurrency can be used to purchase a variety of goods and services. Some of the things that can be bought with USDP include: video games, digital assets, and other online services.
How can I find more information about Pax Dollar?
If you want to find more information about Pax Dollar, you can check out their website or contact them directly.
2019 saw Paxos become the first and only business to be given approval by the U.S. Securities and Exchange Commission (SEC) to conduct a pilot project involving the use of blockchain technology to settle stock trading. The platform went live in 2020, and later that year, Paxos unveiled its first bitcoin brokerage. It was the first cryptocurrency-based business to get preliminary clearance for a “de novo national Trust Bank charter” in 2021.
Given that Paxos is benefiting from a level of reputation and trust among traditional institutions that is uncommon in the crypto realm, it is safe to argue that the company’s “regulatory-first approach” is working. Bank of America, Nomura, ABN-AMRO, PayPal, Credit Suisse, and Mastercard are a few of Paxos’ business clients. More crucially, it might be the key to unlocking widespread use as governments around the world try to catch up with cryptocurrency.
Disclaimer: The information provided in this article is not investment advice from Cove Markets. Cryptocurrency investment activities are yet to be recognized and protected by the laws in some countries. Cryptocurrencies always contain financial risks.
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