What Is Pax Dollar (USDP)? How It Works & Where To Buy It?

Pax Dollar (USDP) is an asset-backed stablecoin that was initially founded in 2018. The Paxos standard has been granted to multiple stablecoins including the likes of the world’s 3rd largest stablecoin, Binance USD (BUSD).

The Pax Dollar has quickly grown to become known as one of the most credible and most used stablecoins in the crypto space. A large number of individuals trade Pax Dollar against other cryptocurrencies like Bitcoin.

USDP is currently the 58th largest cryptocurrency overall and the 6th largest stablecoin by market capitalization.

How Pax Dollar (USDP) Works

Pax Dollar is typically known as a flat-collateralized stablecoin.

Like most other stablecoins, users prefer using stablecoins because of their stability and the ability to also use them in DeFi (decentralized finance). USDP tokens are issued as ERC-20 tokens on the Ethereum blockchain and are fully backed by assets in bank accounts.

Pax dollar offers users a credible stablecoin and the USDP token supply and relevant assets are frequently audited. This is necessary because recent events have led many to lose faith in stablecoins after the UST collapse.

What makes USDP unique is that it is regulated and therefore is always required to be backed by cash or cash equivalents. When assessing the price action history and USDP price statistics it is evident that the stablecoin has performed significantly better than many other stablecoins on the market.

According to the company, USDP is compliant with the necessary regulated services, and all USDP reserves are held in various FDIC-insured US bank accounts.

Additionally, Paxos is unique to other stablecoin protocols because reserves are held bankruptcy-remote – meaning that if Paxos was ever affected negatively, users would still be able to redeem their USDP for the same dollar value. Essentially, Paxos maintains that for every USDP token there is a dollar equivalent in an FDIC-insured bank account.

What Is Pax Dollar (USDP) Used For?

Paxos has utilized its extensive experience to build stablecoin protocols for third parties. This novel “stablecoin-as-a-service” offering has been advertised to several commercial banks, payment processors, global businesses, crypto exchanges, and remittance companies worldwide.

Most notably, the service has gained an immense amount of traction in Latin America. Stablecoins have recently been developed for major Uruguayan and Argentinian digital financial platforms. In a very significant partnership, Paxos worked directly with Binance in the creation of their native BUSD stablecoin

Stablecoin-as-a-service products are always backed by assets like cash or cash equivalents.

Where To Buy Pax Dollar (USDP)

Pax Dollar (USDP) has recently become one of the most talked-about stablecoins because of its unique value propositions and stability during volatile conditions.

Pax Dollar (USDP) tokens can be purchased on both decentralized exchanges as well as a large number of centralized crypto exchanges. But, before purchasing USDP tokens, you’ll need to deposit fiat onto a specific exchange, following this, USDP tokens are then credited to your BIT digital wallet on the exchange.

The crypto exchanges below are the safest place where you can buy, sell and store the tokens.

1. Binance
2. Coinbase
3. KuCoin
4. Gate.io
5. Crypto.com

When purchasing any tokens on a centralized exchange, users need to understand the risks involved. Storing tokens in an exchange essentially means that a user’s private keys aren’t truly theirs – if the exchange were to be exploited their tokens could be lost.

Most individuals agree that the most secure way to store tokens is in a digital or hardware wallet. There are various wallets available on the market for USDP tokens – the most popular and trusted digital wallet is undoubtedly MetaMask.

FAQs About Pax Dollar (USDP)

How long has Pax Dollar (USDP) existed?

Charles Cascarilla and Rich Teo are the individuals who created the Pax Dollar. Cascarilla is also the founding board member of the Association for Digital Asset Markets (ADAM), and a key partner at Liberty City Ventures.

Cascarilla is also known for co-founding Cedar Hill Capital Partners. Additionally, he also has vast experience as a portfolio manager at Claiborne Capital Management, as well as being a financial analyst at Goldman Sachs, and plays a key role as a financial analyst at the Bank of America.

The Pax dollar was initially created in 2018 but the founders secured a digital assets license from the New York State Department of Financial services’ Trust Charter in 2015.

What’s controversial about the Pax Dollar (USDP)?

Stablecoins are notoriously controversial in the world of crypto. Many skeptics believe that stablecoins will fall and thousands of individuals will lose all their money. This was the case with the UST stablecoin after the Terra protocol collapsed, however, every project is unique and all of them can’t be considered equally.

Individuals should always consider factual and logical information about projects. Research as much as possible before investing in any project in the crypto industry.

Let’s take a look at the biggest controversy surrounding Pax Dollar (USDP).

• Tiny market cap compared to top stablecoins – One of the factors that most retail and institutional investors consider is the market capitalization of a coin. USDP has a market cap of less than $1 billion – in comparison to USDT which has a market cap of $72 billion.

  The Pax Dollar has become known as a top stablecoin but it hasn’t experienced the same user adoption and enormous growth in market cap like USDT and USDC. Many individuals believe that all other stablecoins, besides USDT and USDC, won’t ever make it to the top spot. Many believe this because of the recent controversies surrounding the once 3rd largest stablecoin UST.

How many Pax Dollar (USDP) tokens are there?

At the time of writing, Pax Dollar (USDP) has a circulating supply of 945,642,940.11 USDP.

The total supply of Pax Dollar (USDP) is 945,642,940.

Can Pax Dollar (USDP) be mined?

Pax Dollar (USDP) can’t be mined. The generation of new USDP tokens (minting) requires users to deposit an equivalent amount of fiat to obtain USDP. The redemption process is similar but reversed – users can redeem their USDP tokens and each token redemption will be equivalent to $1.

However, USDP holders can earn various yields when participating in DeFi products like staking, farming, and liquidity provision.

Some centralized exchanges also offer various earning incentives for USDP token holders.

What is the market cap of Pax Dollar (USDP)?

The market cap of BitDAO (BIT) is the total amount of coins in circulation multiplied by the current USDP price.

Pax Dollar (USDP) Market Cap = 945,642,940.11 USDP x $1 = $946 million (58th largest market cap).

Note that the market cap fluctuates according to circulating supply and market price.

Biggest Competitors Of Pax Dollar (USDP)

The stablecoin sector is becoming increasingly competitive and there isn’t much traction for new stablecoins. This is mainly because there have been several failed stablecoins in recent years. Historically, algorithmically backed stablecoins have performed especially badly and this has resulted in many individuals being skeptical to invest in stablecoins other than USDC and USDT.

Therefore, the biggest competitors of Pax Dollar (USDP) are:

• USDT
• USDC
• BUSD
• DAI

What Are The Future Plans For Pax Dollar (USDP)?

Pax DOllar (USDP) will seek to continue its growth in the sector and increase its user adoption. Only time will tell if it will be able to compete with heavyweight stablecoins USDC and USDT and carve out its own sizeable chunk of the market.

Pros And Cons Of Pax Dollar (USDP)

Pros

• 100% backed by Fiat assets – Many stablecoins claim to be fiat-backed stablecoins that maintain their peg because they have asset-backed. However, Pax Dollar has proven to be a credible stablecoin that is backed by an equivalent amount of cash.
• Stability – USDP is pegged to the dollar and has maintained pegged to the dollar for the most part. This is even when other stablecoins haven’t been able to maintain their stability during volatile market conditions.
• Easy money transfer – USDP transactions are quick and cheap. It’s also possible to send USDP across various networks, and fees are generally low.
• Partnered with Binance for BUSD – BUSD is the native stablecoin of one of the world’s largest exchanges, Binance. Paxos helped Binance to create their BUSD token, which is now the 3rd largest stablecoin on the market. This indicates the credibility and distinct expertise Paxos has in providing stablecoins-as-a-service.

Cons

• USDP can’t be mined – USDP tokens aren’t mineable, even though they’re ERC-20 tokens. USDP tokens can only be minted and redeemed according to certain protocols, and therefore, USDP tokens are unmineable.
• Not profitable to invest in USDP – Investing in a stablecoin isn’t going to give users the returns they would expect from other cryptocurrencies. A stablecoin aims to remain pegged to the dollar, therefore, investing in a stablecoin won’t typically return generous yields.
• Users don’t remain anonymous when transferring – People who want to purchase BUSD are required to make a bank deposit in most cases, which puts exposure on their identities and puts their sensitive information in the hands of companies.

  When signing up for Binance, you’re required to submit a KYC (Know Your Customer) where you provide proof of identification. This is the only way you can trade cryptocurrency and buy BUSD. Many other exchanges don’t require proof of identification to open an account.