Lesser-Known Exchange Inflates Paxos Standard Daily Trading Volume to Record Highs

While it seems Paxos Standard (PAX) experienced a sudden surge in trading volumes, the stablecoin’s own issuer questions that very data.

AccessTimeIconMar 3, 2020 at 8:04 p.m. UTC
Updated Sep 14, 2021 at 8:16 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now


While it seems Paxos Standard (PAX)  experienced a sudden surge in trading volumes, the stablecoin’s own issuer questions that very data. 

Data appear to show Paxos Trust Company, the New York-based regulated blockchain company, saw daily trading volume on its stablecoin rise to a record high of $1.3 billion on Tuesday – representing a staggering 282 percent rise from the trading volume of $339 million observed on March 1, according to crypto derivatives research firm Skew.

PAX volume
PAX volume

However, the spike in trading volume may not be what it seems, as over $850 million is coming from a lesser-known centralized cryptocurrency exchange based in the British Virgin Islands called TOKOK, according to data source CoinMarketCap. 

Often, random exchanges inflate the volume figures, making the record tally look unreliable. CoinDesk reached out to TOKOK for comment but the exchange did not respond by press time.

PAX transactions on Mar. 3, 2020, according to CoinMarketCap.
PAX transactions on Mar. 3, 2020, according to CoinMarketCap.

If the volume data from TOKOK are excluded, the tally would be about $400 million, the average daily volume witnessed in the last six months. 

A Paxos spokesperson told CoinDesk faulty data on aggregator sites may be the culprit, adding the combined daily trading volume of three stablecoins powered by Paxos - PAX, Huobi stablecoin (HUSD) and Binance stablecoin (BUSD) - is $60 million, according to Messari’s real 24-hour volume. 

The key takeaway here is the headline trading volume figure can be misleading, and investors should always check whether volume is coming through from reliable exchanges before drawing conclusions. 

Transaction count surges

PAX recently registered an all-time high daily transaction count of 6,800 and processed about 6,500 transactions on March 2, according to Coin Metrics Pro. 

PAX Supply And Transactions
PAX Supply And Transactions

The daily transaction count is currently up nearly 600 percent from lows below 1,000 seen in December.

Meanwhile, the stablecoin’s supply has dropped below $200 million for the first time since September, having topped out near $260 million in January. 

Paxos Trust Company launched stablecoin PAX in September 2018 and is responsible for backing every issued token with U.S. dollars held in segregated accounts at FDIC-insured U.S. banks. With market capitalization of $190 million, PAX is currently the fourth-largest stablecoin, according to data source CoinMarketCap.  

Generally speaking, a stablecoin is a cryptocurrency designed to minimize price volatility.  That is achieved by pegging the value of the coin to other asset classes, usually U.S. dollars. 

Paxos launched a Fiat Gateway service in November last year to allow customers to more easily fund their accounts with traditional money. Binance, the world’s largest cryptocurrency exchange by trading volume, was the first to integrate Paxos’ new dollar gateway. 

Meanwhile, in January, the company announced auto-transfers between traditional accounts and stablecoins.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.