PAXG as an ideal gold-backed, non-fiat collateral asset?

Given recent developments regarding US Treasuries and other international reserve assets being seized (which has historically never happened before in economic warfare) there is a school of thought that gold will re-emerge as a widely held sovereign asset by nation states as it can’t easily be frozen etc. Being crypto natives we might scoff and point to BTC, ETH, Frax etc as far better non-fiat stores of value. But gold has a place in many central bankers’ hearts (and a market cap still 14x larger than BTC’s at $12.2tn) and it’s also well handled on chain by Paxos’s PAXG token.

The PAXG token, for those unfamiliar, is an ERC-20 that represents an actual amount of physical gold held in London vaults and managed & audited by Paxos a fully regulated, crypto native trust company based in the US. The PAXG token therefore tracks the spot price of gold closely and holders of PAXG can, if they hold enough, swap their PAXG tokens for actual physical bars of gold in London should they wish.

As such it strikes me that being able to use a trusted crypto representation of actual gold as a solid collateral makes a lot of sense because it truly is a non-fiat store of value, it plays a role in any non-fiat crypto portfolio (alongside BTC etc) but at the moment it is not composable, doesn’t generate yield and is therefore non-performant and under-served in DeFi.

Of course this discussion about collateralising PAXG could occur on any lending platform such as Aave or Oasis/Maker but I imagine that the progressive Euler community with the tools you have built would be the best place to start.


I think in principle promoting a non-USD pegged stablecoin as collateral is not a bad idea. When it comes to PAXG specifically, however, it doesn’t seem like it trades on Uniswap v3 at all. This means that at the moment it can’t even be activated on Euler.

Are you representing the PAX team in some fashion? Perhaps you guys could provide some Univ3 liquidity, activate a market on Euler and we can get started there. :slight_smile:

Interesting re Uni v3 and lack of a PAXG pool - got it.

I’m not affiliated with Paxos in any way: I just hold some as part of my broader investment strategy and was hoping to find some composability and couldn’t.