What Is PAX Gold (PAXG)? How It Works, Tokenomics and Risks

PAX Gold is a crypto token issued by Paxos Trust Company, N.A., where one PAXG represents one fine troy ounce of a London Good Delivery gold bar stored in professional vaults. The token runs on both Ethereum and Solana, according to the official paxg.com website. As of October 24, 2026, PAXG trades around $3,999.5 with a market cap of $1.78 billion, ranking 57th by market cap according to CoinGecko data.

PAXG at a Glance

Data as of October 24, 2026.

The problem it tries to solve

Owning physical gold is cumbersome. A standard COMEX gold contract runs 100 troy ounces, though smaller Micro (10 oz) and E-mini (50 oz) contracts exist. Buying LBMA gold bars or gold ETF shares still involves T+2 settlement, storage costs, and settlement risk whenever multiple parties are involved.

Paxos built PAXG to address both the lot-size problem and the speed problem. A single token can be split down to 18 decimals, letting someone own a tiny fraction of an ounce instead of a full bar. On-chain transactions settle nearly instantly, and according to Paxos' whitepaper, minting on its own platform is typically completed the same day, with larger transactions settling the next business day.

How PAX Gold works

Every circulating PAXG token is backed by one ounce of allocated gold held in LBMA-standard vaults. Paxos, the custodian, is a U.S. national trust company regulated by the Office of the Comptroller of the Currency (OCC). According to its official site, the gold reserves are held bankruptcy-remote and segregated from Paxos' own corporate assets, meaning they are structurally shielded if Paxos itself runs into financial trouble.

Those reserves get audited monthly through independent third-party attestation reports that Paxos publishes. Holders can also verify the serial number, weight, and vault location of their specific gold by entering their Ethereum or Solana wallet address into the official lookup tool on paxg.com. This feature applies specifically to PAXG held in self-custody on-chain wallets, not tokens held on exchanges or custodial wallets.

On the redemption side, PAXG holders can convert their tokens into allocated gold, unallocated gold (available to institutional clients), or fiat currency through the Paxos platform, and vice versa. PAXG's Ethereum smart contract code is public and available for review on Paxos' official GitHub repository.

What PAXG is used for

PAXG serves four main purposes. First, it acts as a store of value that tracks the real-time spot price of gold, giving holders gold exposure without holding physical bars. Second, it functions as a trading instrument, including through the PAXGUSDT futures contract on Binance. Third, it works as a redemption vehicle, convertible directly into physical Good Delivery gold, unallocated gold for institutions, or fiat. Fourth, according to CoinGecko's official description, PAXG is also used on lending platforms and elsewhere beyond exchanges, though specific lending protocol details aren't named in the sources reviewed.

PAXG tokenomics

PAXG's tokenomics differ from most crypto tokens. There's no scheduled emission, inflation, or disclosed allocation to a founding team or early investors in the sources reviewed. PAXG's supply is elastic: new tokens are minted whenever someone purchases new gold through Paxos, and tokens are burned whenever holders redeem them for physical gold or fiat.

As of October 24, 2026, both circulating supply and total supply stood at 444,094 tokens, with no fixed maximum supply since the figure simply tracks how much physical gold Paxos holds. For readers looking for team, investor, or vesting unlock schedule details similar to typical DeFi project tokens, that kind of information hasn't been published in the official sources we checked, largely because PAXG doesn't follow that type of initial distribution model.

Team, funding and brief history

PAXG is issued by Paxos Trust Company, N.A., a U.S. national trust company regulated by the Office of the Comptroller of the Currency (OCC). The sources reviewed don't name specific founders for this token, a precise launch date, or any funding round figures.

What official Paxos documentation does confirm is that PAXG was initially available only on Ethereum before later expanding to Solana. PAXG can also be traded on itBit, Paxos' own exchange, in addition to various major crypto exchanges worldwide.

Market and on-chain data

According to CoinGecko data as of October 24, 2026, PAXG trades at $3,999.5 with 24-hour trading volume of $110.26 million and a market cap of $1.78 billion, equal to its fully diluted valuation since no tokens remain locked. PAXG's all-time high was $5,619.1, recorded on January 28, 2026, meaning the current price sits roughly 29% below its peak. Over the past 30 days the price fell 6.1%, but over the past year it's down only 1.6%, suggesting PAXG's price moves in line with broader gold price fluctuations rather than typical crypto pump-and-dump patterns.

On Binance Futures, the PAXGUSDT contract trades at $4,002.3, down 0.94% over 24 hours, with $69.6 million in trading volume. The funding rate sits at 0.0050% per period, a small but positive figure meaning long positions are paying a slight fee to shorts, a mild signal of bullish positioning in the futures market. Open interest, the total value of outstanding futures contracts, stands at $112 million, up 13.4% over the past 30 days, indicating more capital has flowed into PAXG futures positions recently. Meanwhile, 75% of trader accounts on Binance Futures hold long positions, a fairly lopsided ratio that leaves the market vulnerable to a long squeeze if gold prices suddenly correct sharply. On Binance's own price data, PAXGUSDT is down 6.5% over 30 days and down 1.5% over 90 days, consistent with CoinGecko's figures.

Competitors

Competitor market figures aren't included above since none appeared in the sources reviewed for this article.

PAXG risks

Several concrete risks are worth weighing before interacting with PAXG.

First, custodial centralization risk. All the gold underlying PAXG is stored and managed by a single entity, Paxos. If Paxos faces serious operational or regulatory trouble, the gold redemption process could be disrupted even though reserves are structurally bankruptcy-remote.

Second, full dependence on spot gold prices. PAXG has no upside independent of physical gold, so its movements purely track global gold prices, including during corrections like the roughly 29% drop from its all-time high since January 2026.

Third, regulatory and geographic restriction risk. Paxos' official site states PAXG is currently unavailable to European Union residents, suggesting similar restrictions could emerge in other jurisdictions down the line.

Fourth, futures leverage risk. PAXGUSDT open interest has risen 13.4% over 30 days while 75% of accounts hold long positions, a setup that leaves the market prone to mass liquidations if gold prices drop sharply.

Fifth, liquidity risk relative to conventional gold markets. PAXG's roughly $110 million in 24-hour trading volume is small compared to the scale of global physical gold and gold ETF markets, and its elastic supply means market cap can shift quickly during large institutional redemptions.

Sixth, smart contract technical risk. Even though PAXG's Ethereum code is public and auditable via GitHub, technical bugs or exploits remain a risk as with any blockchain-based asset.

How to buy and trade PAXG in Indonesia

In Indonesia, crypto asset trading including PAXG falls under OJK oversight. Transactions are best routed through officially registered exchanges rather than platforms with unclear regulatory standing.

For traders wanting exposure to PAXG's price movement without holding the token directly, Binance offers the PAXGUSDT futures contract. For those wanting to hold PAXG directly as a physical gold proxy, the token is available on both Ethereum and Solana, and can be stored in a self-custody wallet to take advantage of Paxos' official gold serial number lookup tool.

What it means for traders

Since PAXG tracks the real-time spot price of gold, broader gold price moves, not token-specific news, are the main thing to watch. The $5,619.1 all-time high from January 28, 2026 is a useful reference point for how far current prices sit below their peak, currently around 29%.

On Binance Futures, the 75% long-account ratio is worth monitoring because it leaves the market skewed in one direction. If gold prices reverse sharply, the risk of a long squeeze is higher than in a more balanced market. Rising open interest, up 13.4% over 30 days, also signals more open positions, which means greater potential volatility if liquidations cascade.

The funding rate of 0.0050% per period is small, so there isn't heavy pressure from funding costs yet. Traders tracking the spread between CoinGecko's spot price ($3,999.5) and Binance futures price ($4,002.3) can use that gap as a minor gauge of sentiment in the derivatives market versus spot. Paxos' monthly attestation reports are also worth checking periodically, since that's where independent verification of the gold reserves backing the token gets published.

It's worth remembering that futures trading involves leverage, and liquidation risk is significantly higher than simply holding PAXG in a spot wallet.