Steemit Crypto Academy Week 7 Task: Stable coins - Part 2 for @yohan2on
Hello Steemians,
Welcome to Steem Crypto Academy Week 7.
I will be talking about the task: Stable coins Paxos Standard (PAX)
What is Paxos Standard?
Paxos Standard is a stablecoin (ERC-20 protocol), and it was built on the Ethereum blockchain technology in 2018. The Paxos Standard Token is fully backed by 1: 1 USD issued by the Paxos Trust Company and is approved and regulated by the NYS Department of Financial Services. PAX is also known as USD Digital.
Like other stable coins like USDT, PAX aims to combine US dollar stability and durability with digital currency advantages. To do so so that, immediately, at any moment, and virtually without commissions, it can be transferred over the Internet to everyone on the planet.
The stablecoin PAX, released by the Paxos startup, whose capitalization recently exceeded $ 50 million, The Paxos Trust is fully controlled by the US Securities and Exchange Commission (SEC). Accordingly, all users wishing to purchase PAX can be sure that the transaction will fully comply with the requirements of the current legal framework.
Features of the Paxos Standard
PAX is the first stablecoin to be fully backed by the US dollar.
PAX can only be created when new US dollars are entered into the Paxos system. One new PAX token is created when a person sends one US dollar to Paxos, which ultimately goes to Paxos' regulated bank account. PAX is not created or spawned until purchased, so the total PAX supply is entirely dependent on the demand for the token.
The entire volume of PAX tokens released to the market is covered by US dollars, which are stored in banks with insurance from the Federal Deposit Insurance Corporation. The auditing company Withum checks monthly for the presence of dollar reserves in these banks.
Disadvantages of Paxos Standard
- Unoriginal concept and software basis. The creators of PAX are constantly focusing on the originality of their cryptocurrency, but in reality, they do not offer any innovative solutions to the market. In fact, we can say that the Paxos Standard stablecoin is a classic ERC-20 token.
- Blockchain.com is promoting PAX called USD Digital. By this, she greatly confuses her clients.
How is PAX provided?
The Paxos Standard Token is fully backed by 1: 1 USD issued by the Paxos Trust Company and is approved and regulated by the NYS Department of Financial Services.
How does the technical part look like?
The Paxos Standard was designed as an Ethereum token written in accordance with the ERC-20 protocol so that anyone with an Ethereum wallet can send and receive Paxos Standard tokens.
How safe is PAX?
The smart contract has been validated by smart contract experts Nomic Labs and ChainSecurity, and the national auditing firm Exum, which will operate at the end of the month, will conduct attestation procedures on token and bank accounts.
What makes PAX different from other stablecoins?
- No commission when converting to fiat;
- Unaffected by volatility;
- The ability to quickly convert assets 24/7;
- Each token is backed by US dollars, which lies in accounts with US banks and insured by the Federal Deposit Insurance Corporation (FDIC).
Conclusion?
PAX is designed primarily for the Paxos platform, not for stock trading (however, it can also be traded on the stock exchange). If you are looking for an option to save capital and do not want to put up with the volatility of cryptocurrencies, then PAX is an excellent choice.
Thanks for reading my post.
Special thanks to Prof @yohan2on for this week lecture.