For millennia, gold has been a reliable store of value, but its physical form presents challenges: storage costs, transport difficulties, and limited divisibility.Now, a new approach is emerging. PAX gold (PAXG) tackles these issues by tokenizing physical gold, creating a digital asset that retains gold’s inherent value while leveraging the benefits of blockchain technology.
Each PAXG token represents one fine troy ounce of gold meeting the London Good Delivery standard, stored in professional vaults-the same rigorous standard used by central banks and large investors. But how does a tangible metal transform into a digital token accessible to anyone with an internet connection? Let’s break down the process.
What is PAX gold (PAXG)?
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Tokenizing gold isn’t just about digitizing a commodity; it’s about transforming a static asset into a programmable one with verifiable quality. PAXG can be traded 24/7, bypassing the delays and fees associated with customary gold transactions. It can be transferred globally in minutes using the Ethereum blockchain, used as collateral in decentralized finance (DeFi) protocols, or integrated into automated trading strategies.
PAXG unlocks practical fractional ownership. Instead of needing to purchase a hefty 400-ounce bar-currently costing upwards of $1,800,000-investors can acquire any fraction of an ounce.There are no storage fees, insurance costs, or physical security concerns. The basic characteristics that have made gold valuable for centuries remain intact,enhanced by the utility of tokenization.
Step 1: Purchase and Payment
The tokenization journey begins with a customer’s PAXG purchase. PAXG is available on major cryptocurrency exchanges including Kraken, Coinbase, Binance, Gate, and KuCoin, and can be held in any Ethereum-compatible wallet.
Upon purchase,Paxos initiates gold acquisition through its network of LBMA-cleared channels,ensuring all gold meets the London Good Delivery standard-the highest quality benchmark in the gold market.
Step 2: Gold Acquisition and Allocation
Paxos sources physical gold bars from LBMA-approved suppliers. Each bar must be at least 99.5% pure gold and bear the stamp of an LBMA-approved refiner. These bars typically weigh around 400 troy ounces, though slight variations occur.
Once acquired, the gold is allocated, meaning specific bars are assigned to specific customers.This differs from unallocated gold, where customers have a claim on a general pool.With PAXG, your tokens correspond to identified, serialized bars stored in LBMA-certified vaults in London.
each bar’s unique serial number, refiner stamp, and weight are recorded and linked di
