Pax Dollar (USDP) is an experimental digital asset (see below for further information on digital assets and the Pax Digital Assets Economy). It is intended to help provide a medium of exchange with stable value. To some, it might be seen as a utility token that would allow owners to transfer money instantly without waiting for confirmations. While others might envision it as being able to launch the first sizeable peer-to-peer decentralized marketplace or even an ICO accelerator. Either way, as a digital asset it will be highly experimental. It is therefore very important to understand how it works, how we plan to build on top of Pax and what the long-term plans are.
The Pax Digital Asset Economy is a new way to build and deploy new digital assets. For example, to build an ICO that would use a new type of asset (such as Pax) we would deploy the necessary tooling using the Pax Token and launch the ICO using Pax as a currency to pay all transaction fees and buy tokens from contributors. These transactions would be verified by miners on the network, and there is no need for additional servers or trusted third parties as long as all transactions are encoded into the blockchain (see further information below). The project will begin with an initial core of service providers, but it is designed so that anyone can become or partner with an entity in this ecosystem.
What are stablecoins?
Stablecoins are a new class of digital asset that resists volatility. They can be thought of as US dollar-backed tokens, but with one critical difference: they are not issued by a central bank or government in the traditional sense, and they cannot be sent to anyone (although some may issue tokens in exchange for goods or services). Instead, they are created through automated procedures known as ‘minting’ and ‘deposit’. The processes of minting and depositing make them proportional to their reference stable currency (USD, EUR or any other currency).
Stablecoins can be thought of as “new digital assets and new financial services.” They exist on top of the existing financial system, and this includes banks, payment processors and even existing currency exchanges, as well as the existing market infrastructure such as brokerage firms.
Many market participants are interested in stablecoins because they can provide greater stability compared to traditional assets (whether this exists or not is a discussion for another time). Stablecoins are sometimes used in cross-border payments between exchanges where trading is taking place in different currencies (for example, when your USD transfer with Coinbase automatically converts to AUD). Others use stablecoins when they want to keep their cryptocurrency holdings safe (at least until they need them).
✨ #USDP
💵 Current Price: 0.9999
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Pax dollar explained
Pax is an acronym for Pax Digital Asset Economy. It is designed to solve problems in the digital assets economy currently and will evolve over time. It is fully open source, built on Ethereum, and uses ERC20 tokens rather than ‘native’ digital assets to achieve its goals. This means that Pax coin can be used by anyone, in any way they choose. It is highly experimental and very much in development; we’re building it to learn and help others in the community do the same. Over time, we will offer various different ways of taking part.
A Pax coin can be thought of as a new type of asset with a new type of money. It is mainly mined through Proof-of-Work (PoW) and Proof-of-Stake (PoS), but it can also be created through limited emission. Pax token will always be locked in to the Ethereum network, as in most cases we expect to use it for smart contracts or other things that require network resources such as data storage and computational power. We have not yet decided whether PAX is subject to gas fees, will create its own resource pool or is dependent on transaction fees from the stateless off-chain payment channel.
What are the benefits of Pax?
Pax is named after Paxos, a Greek island where they minted coins with high liquidity. The central idea here is that there exists a group of users who want stablecoins but who also don’t want to use a trusted third party or rely on a central issuer (a bank) that could close up shop at any time. The idea of a stable digital asset might be anathema to ‘crypto maximalists’ who like to chant, “trust no one”, but the reality is that there are people in the world (and in the crypto space) who want this.
Those wanting an open, trustless stablecoin have never had one before. While there has been an explosion of new digital assets and tokens over the last few years, this is arguably where they’ve needed most – with no trusted third parties required and no central issuing authority.
