ARC: Add Paxos Standard (PAX) Collateral & Borrow Support

Reading time saved: 3 minutes

3 replies, 2059 views, 5 likes


The Paxos Trust Company proposed adding Paxos Standard (PAX), a USD-backed stablecoin regulated by the NYDFS, to Aave as a collateral and borrowing alternative. Despite concerns about the ownership of the address holding the majority of PAX, Paxos emphasized its regulation and trustworthiness, and is seeking community support to submit an Aave Improvement Proposal (AIP) for PAX's inclusion.

The discussion revolves around the proposal to add Paxos Standard (PAX), a USD-backed stablecoin regulated by the NYDFS, to Aave as a reliable alternative for collateral and borrowing. PAX, the 5th largest USD-backed stablecoin, has passed a SOC-II audit and is used for various purposes such as payment for other blockchain-based assets, store-of-value, and lending/borrowing on known CeFi institutions like BlockFi and Celsius. The token's market cap fluctuates as users purchase and redeem PAX. It is included in Maker DAO’s pool and available for trading on DeFi Apps Curve and Uniswap, as well as many centralized exchanges. The AIP submitter, Paxos Trust Company, is a qualified custodian and trust company regulated by NY DFS and is the sole issuer of the PAX token. PAX received an "A-" risk rating based on Aave's Risk Methodology1.

Paxos_Global emphasized that Paxos Standard is regulated by the NY Department of Financial Services (DFS) and that the OCC granted a national trust bank charter to Paxos with preliminary conditional approval. They claim that no other stablecoin has the level of product and company regulation as PAX and Paxos1. However, Ryan raised a concern about the ownership of the address holding the most PAX (55.6% of the total supply), which hasn't moved since a significant amount of PAX was sent to it 41 days ago, and a large amount of PAX was minted to it 21 days ago2.

In response to the discussion, Paxos_Global announced the posting of the Risk Analysis for PAX USD and requested the community to allocate proposition power to a specific wallet so they can submit an AIP. They also shared a blog post discussing the trustworthiness of PAX compared to other large stablecoins and invited questions from the community3,4. The discussion concludes with the anticipation of getting PAX listed on Aave.

Posted 3 years ago

Last reply 2 years ago

Summary updated 2 months ago

Last updated 09/12 13:53