What is Pax Dollar (USDP)
Pax Dollar is a fiat-backed stablecoin. USDP is an ERC-20 token that is 1:1 collateralized with the USD. 1USDP is a cryptocurrency equivalent to $1USD. Founded in 2018 by Paxos, Pax Dollar set out with the goal of making the global macroeconomic environment more frictionless. In other words, their goal was to create an easily convertible and transferable version of the dollar in order to make digital assets, commodities and securities easily transferable worldwide.
What makes it unique?
The biggest hurdle for stablecoins has been regulation, USDP is ahead of the game in this regard. Paxos, the company behind USDP, has a charter with the New York State Department of Financial Services, allowing them to provide crypto services in a regulated manner;
USDP is backed by fiat held in accounts controlled by the company;
Reserves are handled by the Paxos Trust Company which is regularly audited to ensure the safety of funds;
Uses OpenZeppelin security libraries to help deter and stop fraudulent activity;
Being ERC-20, USDP inherits the security of the Ethereum network, allowing full integration into Ethereum dApps.
The market for stablecoins has exploded recently and competition is fierce. Pax Dollar sets itself apart in this space by having the crucial step of being regulated. This means that USDP can be legally transferred, and used to facilitate the transfer of assets. Another contentious point for stablecoins is the integrity of their reserves. Much speculation has arisen about how truly backed some stablecoins are. Paxos avoids this doubt by having their company registered and audited, so users can rest assured their funds are safe and accounted for. It is worth mentioning that Paxos reserves the right to pause transactions if it feels the security of the network is in danger.