Paxos Gold PAXG

Intro – What is PAXG?

Paxos Gold (PAXG) is a regulated, asset-backed digital token that represents ownership of physical gold. Each PAXG token corresponds to one fine troy ounce of London Good Delivery gold stored in professional vaults operated by Brink’s in London. The token is issued by Paxos Trust Company, a New York–chartered trust company regulated by the New York Department of Financial Services (NYDFS).

PAXG combines the monetary properties of physical gold with the programmability and composability of blockchain assets. Holders benefit from direct, unencumbered ownership of allocated gold while retaining on-chain transferability, divisibility, and DeFi compatibility. The underlying gold bars are fully allocated, bankruptcy-remote, and audited regularly, with serial numbers available for verification.

As a non-sovereign, inflation-resistant store of value with millennia of monetary history, gold is structurally well aligned with Frankencoin’s design philosophy of conservative, over-collateralized issuance. Tokenized gold, in particular PAXG, represents a mature and comparatively low-volatility collateral class that diversifies Frankencoin’s collateral base beyond crypto-native assets while preserving on-chain enforceability.

Data about the Token

• Issuer: Paxos Trust Company, LLC (NYDFS-regulated)
• Backing: 1 troy ounce of LBMA London Good Delivery gold per PAXG
• Market Capitalization: CHF 1.2Bn
• Average Daily Trading Volume: CHF 120m across centralized and decentralized venues
• Listings: Binance, Coinbase, Kraken, Bitfinex, OKX; DeFi liquidity on Uniswap and Curve (Ethereum mainnet)
• Launch & Liquidity History: Live since 2019, with persistent liquidity across multiple market cycles
• Number of Holders: >60,000 on-chain addresses on Ethereum mainnet
• Custody & Audits: Allocated gold held at Brink’s vaults; regular attestation reports published by Paxos

Proposed Parameters

• Collateral: PAXG
• Smart Contract: 0x45804880de22913dafe09f4980848ece6ecbaf78
• Reserve Requirement: 20%
• Risk Rate: 0.5%
• Liquidation Price: ZCHF 2,500
• Minting Limit: ZCHF 5,000,000

Value Proposition

Adding PAXG as collateral introduces tokenized physical gold as a first-class primitive within the Frankencoin system, strengthening its positioning as a conservative, resilience-focused Swiss-franc stablecoin.

Key Benefits

1. High-Quality, Non-Crypto-Native Collateral
Gold historically exhibits low correlation to crypto markets and equities, particularly during periods of market stress. PAXG therefore reduces systemic tail risk and improves the overall robustness of Frankencoin’s collateral pool.

2. Strong Monetary Alignment with CHF
The Swiss franc and gold share similar reputational attributes: stability, conservatism, and long-term value preservation. Enabling gold-backed borrowing of ZCHF reinforces Frankencoin’s positioning as a stability-first monetary system rather than a speculative DeFi product.

3. Institutional-Grade Risk Profile
PAXG benefits from regulated issuance, audited reserves, and legally enforceable ownership claims. This makes it attractive for family offices, treasuries, and conservative DeFi users seeking exposure to ZCHF without taking crypto-equity risk.

4. Capital Efficiency for Gold Holders
PAXG holders can unlock liquidity in Swiss francs without selling gold exposure, enabling hedging, reinvestment, or spending while maintaining a long-term position in physical gold.

5. Strategic Diversification of Frankencoin
Introducing PAXG materially diversifies Frankencoin’s collateral composition across crypto-native assets, infrastructure tokens, and real-world, commodity-backed assets, supporting long-term scalability and resilience.