About
PAX Gold (PAXG) is a regulated tokenized asset designed to bring the value and ownership characteristics of physical gold onto the blockchain. Each PAXG token represents direct ownership of one fine troy ounce of London Good Delivery gold stored in professional vault facilities, giving holders a legally enforceable claim to specific allocated gold rather than merely price exposure. The token was created to democratize access to gold investment, enabling users to trade, transfer, and hold gold data-efficiently using blockchain infrastructure, while still retaining the traditional asset’s intrinsic value.
From a functional perspective, PAXG alleviates many of the barriers associated with physical gold ownership. Investors traditionally face challenges such as high minimum purchase costs, storage fees, security concerns, and delayed settlement times. PAXG removes these frictions by enabling fractional ownership down to very small amounts, near-instant on-chain settlement, and significantly lower transaction costs compared with physical bullion trading. These features make gold accessible to a broader range of users, from institutional buyers to retail investors.
The token is issued by Paxos Trust Company, a regulated financial institution under the oversight of the New York State Department of Financial Services (NYDFS). This regulatory status ensures that the gold backing the token is custodied in segregated accounts and audited regularly by independent third parties, with monthly attestation reports verifying that the number of PAXG tokens in circulation aligns precisely with the amount of allocated gold held in vaults. This regulatory and audit framework is critical to maintaining trust and transparency in the gold-backing mechanism.
PAXG’s integration with smart contract standards allows it to interact seamlessly across the Ethereum ecosystem, including wallets, exchanges, decentralized finance protocols, and other blockchain services. Holders can trade PAXG 24/7, use it as collateral in DeFi platforms, or redeem tokens for physical gold bars or fiat currency through Paxos under specified conditions. The mint-and-burn mechanism ensures supply reflects actual gold reserves: new tokens are minted when gold is deposited and burned when gold is redeemed, maintaining a strict 1:1 backing.
Overall, PAXG functions as a bridge between traditional commodities markets and modern digital asset infrastructure, preserving the store-of-value characteristics of gold while adding blockchain-enabled liquidity, divisibility, and transferability. It has seen adoption in both centralized financial products and DeFi markets, where its liquidity and transparent backing have positioned it as a key tokenized real-world asset.
