FAQs
Review frequently asked questions about Pax Gold (PAXG)
Pax Gold (PAXG) is an asset-backed token where one token represents one fine troy ounce of a London Good Delivery gold bar, stored in professional vault facilities. Anyone who owns PAXG has ownership rights to that gold under the custody of Paxos Trust Company. Since PAXG represents physical gold, its value is tied directly to the real-time market value of that physical gold. PAXG gives customers the benefits of actual physical ownership of specific gold bars with the speed and mobility of a digital asset. Customers are able to have fractional ownership of physical bars. On the Paxos platform, customers can convert their tokens to allocated gold, unallocated gold, or fiat currency (and vice versa) quickly and efficiently, reducing their exposure to settlement risk. PAXG is also available for trading. PAXG will also be available on other crypto-asset exchanges, wallets, lending platforms and elsewhere within the crypto ecosystem. At any time, PAXG holders can lookup the serial number, value and physical characteristics of their vaulted gold just by entering their Ethereum wallet address on the PAXG lookup tool on Paxos.com/paxgold.
Physical gold on the blockchain has the advantages of representing legal ownership of physical allocated gold, but does not have the drawbacks of limited transportability or high storage costs usually associated with it. Instead, it has the divisibility, fungibility and tradability of any digital asset like bitcoin. In other words, the best of physical and digital assets at the same time!
The amount of gold representing the total supply of PAXG is a 1:1 ratio – one fine troy ounce of gold equals one PAXG token. The total supply of gold representing PAXG changes continuously as the market capitalization of PAXG increases and decreases.
Yes. It is possible to own tiny fractions of a token, which are divisible out to 18 decimal points. If you purchase PAXG directly from Paxos.com, the minimum purchase is 0.01 PAXG (1% of a PAXG token – or roughly $15).
When a customer trades for allocated gold bars, they receive ownership rights to specific gold bars that are held in a precious metal dealer’s vault on the customer’s behalf. Allocated gold is identifiable with a unique serial number, purity, and weighting for each bar.
When a customer trades for unallocated gold, they do not have actual ownership over specific gold bars; instead, they have a general entitlement to a certain quantity of gold that an institution promises to deliver. This is hypothetical gold and is a liability of the institution that one has a claim against. This is similar to the way a traditional bank operates – customers don’t own specific notes, but rather they have a credit that can be paid out upon request.
On-Chain Transaction fees:Whenever PAXG tokens are sent on Ethereum network, Paxos charges a small 0.02% fee of the amount of PAXG sent on the blockchain. 0.02% on-chain transaction fees are covered by users. For example, if you want to send 10 PAXG from one Ethereum address to another, and you want to ensure that the receiver gets at least 10 PAXG after fees, you should send at least 10.0020004001 PAXG total to cover the cost of the on-chain transaction fee. If you initiated a transfer of 10 PAXG, the receiver would get 9.998 PAXG after fees.
Storage fees: Paxos does not charge gold storage fees to its customers at this time.
Creation and Destruction fees:Whenever you buy or sell PAXG from your Paxos account (on either the wallet dashboard or PAX Gold pages), Paxos charges small fees to process both the creation and destruction of PAXG tokens (see fee schedule below). This includes all sales or conversions of PAX Gold to or from USD, gold bars or unallocated gold.
These fees do not apply when purchasing & selling tokens through our exchange order book or anywhere else outside the Paxos wallet. If you wish to purchase or sell PAXG through our exchange order book your trades may be subject to applicabletrading fees.
Creation & Destruction Fee Schedule:
| Amount of Pax Gold Tokens | Estimated USD* (based on August 2020 market value of roughly $2k/oz) | Creation & Destruction Fee applied whenever PAXG is converted or redeemed for USD, PAX USD, unallocated gold or gold bars |
| 0.03** < 2 | $60 – $4K | 0.02 PAXG minimum fee |
| 2 < 25 | $4K – $50K | 1.000% |
| 25 < 50 | $50K – $100k | 0.750% |
| 50 < 75 | $100K – $150K | 0.500% |
| 75 < 200 | $150K – $400K | 0.250% |
| 200 < 800 | $400k+ | 0.150% |
| 800+ | $1600k+ | 0.1250% |
*Fee percentage is calculated based on PAXG tokens; USD is included in this chart as an estimate for reference only
**The minimum purchase amount is 0.03 PAXG which includes PAXG fees
Sending a Pax Gold (PAXG) token from one ERC-20 address to another, such as when moving funds from a wallet to an exchange, is an on-chain transaction; possession of the token is transferred and recorded on the Ethereum blockchain.
There are two kinds of fees that occur when you send PAXG on the blockchain:
- Standard‘gas’fee: Sending digital assets on Ethereum, requires computing power, or ‘gas.’ Just like any other Ethereum token, PAXG requires standard gas fees paid in ETH to compute the transaction.
- PAXG on-chain transaction fee: PAXG charges an additional fee. That fee is set to 0.02% of the amount of PAXG sent on the blockchain.
For example, if you want to send 10 PAXG from one Ethereum address to another, and you want to ensure that the receiver gets at least 10 PAX after fees, you should send at least 10.0020004001 PAXG total to cover the cost of the on-chain transaction fee. If you initiated a transfer of 10 PAXG, the receiver would get 9.998 PAXG after fees.
User guide
