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

Sentence Rational

Paxos Standard (PAX) is the 5th largest USD backed stablecoin, is highly trustworthy and regulated by the NYDFS and is the only coin to have received a successful SOC-II audit. Adding PAX to Aave will provide users another, trustworthy alternative to post collateral and borrow.

References

Link to:

Paragraph Summary

Paxos Standard (PAX) was launched in 2018 and is a USD stablecoin that is 100% backed by US dollars held bankruptcy remote. Paxos issues PAX and both the company and token are regulated by the NY DFS. Full PAX attestations are completed monthly and posted to www.paxos.com/attestations.

PAX is used in a variety of use cases including a means of payment for other blockchain - based assets, trustworthy store-of-value, settlement of assets with fiat currency outside of traditional banking hours, and being lent / borrowed on known CeFi institutions like BlockFi and Celsius. Paxos would like to extend the functionality to the DeFi space through listing on Aave.

Motivation

Only PR commits are to list PAX asset.

Specifications

1. What is the link between the author of the AIP and the Asset?
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.

2. Provide a brief high-level overview of the project and the token
PAX is the most secure, highest regulated stablecoin available. Token was launched in 2018 to facilitate many blockchain-based use cases such as payments, stable digital storage, and trustworthy collateral.

3. Explain positioning of token in the AAVE ecosystem. Why would it be a good borrow or collateral asset?
PAX is an excellent source of collateral because it is the most reliable, regulated stablecoin. PAX is valuable to borrow due to its trustworthiness and range of use cases including store of value, settlement, collateral, trading, and peer to peer transfer.

4. Provide a brief history of the project and the different components: DAO, products; and how it overcame stressed conditions
PAX is included in Maker DAO’s pool and available for trading on DeFi Apps Curve and Uniswap, as well as traded on many different centralized exchanges.

5. How is the asset currently used?
Typical use cases for USD stablecoins

6. Emission schedule
PAX tokens are minted/burned based on client demand. The process for minting and burning has been approved by the NYDFS and is regularly audited by a third party. Full monthly attestations available on the paxos website. Market cap fluctuates as users purchase and redeem PAX.

7. Token permissions and upgradability

  1. Note that all of the following roles are held by multi-sig addresses.
  2. Controlling the token supply - The supplyController address can mint and burn the token based on the actual movement of USD in and out of the reserve based on requests for the purchase, conversion and redemption of PAX.
  3. Contract Owner - Can pause/unpause the contract and propose a new owner.
  4. Asset Protection Role - As required by our regulators, we have introduced a role for asset protection to freeze or seize the assets of a criminal party when required to do so by law, including by court order or other legal process.
  5. Upgradeability Proxy - To facilitate upgradeability on the immutable blockchain we follow a standard two-contract delegation pattern: a proxy contract represents the token, while all calls not involving upgrading the contract are delegated to an implementation contract. The proxy used here is AdminUpgradeabilityProxy from ZeppelinOS.

8. Market data (Market Cap, 24h Volume, Volatility, Exchanges, Maturity)

  1. Market Cap = ~$1B
  2. 24hr trading volume: $75 - $150M
  3. Exchanges: Binance, itBit, Bitfinex, Coinsbit, Atomars, etc

9. Social channels data (Size of communities, activity on Github)
Paxos Twitter: 16k followers

10. Contracts date of deployments, number of transactions, number of holders for tokens

  1. Deployed on Sep-08-2018 03:30:23 PM +UTC

    As of 4:46EST on April 20, 2021
    Transactions: 3,131,643
    Holders: 108,548

RISK
Below is the Risk Analysis for PAX based on Aave’s Risk Methodology. By these standards PAX received an “A-” risk rating. A few caveats/notes

  • Paxos Standard is regulated by the NY Department of Financial Services (DFS)
  • The OCC granted a national trust bank charter to Paxos with preliminary conditional approval
  • There is no other stablecoin with the level of product & company regulation than PAX & Paxos.

4 Likes

The address that holds the most PAX (0x41673ae53a2ffb749e9769048a36fa23ce28cf89
) holds 621,137,581.95 PAX (55.6% of the total supply)

353,000,000 PAX was sent to this address 41 days ago
268,137,572 PAX looks like it was minted to this address 21 days ago

It hasn’t moved since it went in. Whose address is this? Just strikes me as a bit odd

1 Like

All, Risk Analysis for PAX USD is posted.

We are asking community to allocate proposition power to the below wallet so we can submit AIP!

0xbe33FE33C41F18CcAddafD732eA00D499089d6C5

We are very exciting about getting PAX listed on Aave.

1 Like

We recently published a blog post which discusses the trustworthiness of PAX compared to other large stablecoins. Please let us know if you have any questions!