Paxos Makes Fresh Push for DeFi Market With New Oracle Integration

Paxos’ stablecoin tokens have mainly been playing catch-up since the DeFi spike in 2020.

AccessTimeIconJan 14, 2021 at 4:00 p.m. UTC
Updated Sep 14, 2021 at 10:56 a.m. UTC
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Paxos is teaming up with Chainlink in a bid to make its asset-backed tokens more widely available across the decentralized finance (DeFi) market.

The paxos standard (PAX) and paxos gold (PAXG) tokens are now available on Chainlink’s oracle network, according to a blog post shared early with CoinDesk. Chainlink operates as background pricing and data infrastructure for many DeFi projects and accounts for over 50% of on-chain smart contract calls among oracles, according to DeBank.

Paxos’ stablecoin tokens have mainly been playing catch-up since the DeFi spike in 2020. Of the top DeFi lending platforms according to DeFi Pulse, only MakerDAO currently offers PAX as a collateral type.

Moreover, stablecoins dai, usd coin (USDC) and tether make up the lion’s share of stablecoin activity on the Ethereum blockchain (where DeFi apps tend to live), according to data provider DeBank.

Current Ethereum-based stablecoin supply with PAX in light blue
Current Ethereum-based stablecoin supply with PAX in light blue

The addition of Paxos’ tokens to Chainlink’s feeds necessarily makes integration of new assets easier for each DeFi application leaning on the data provider. It also adds validity to the growing trend of real world assets making their way to the $21 billion DeFi market.

Regulated DeFi collateral

Paxos is using its sterling reputation to lure investors toward its stablecoins.

Each Paxos product is backed by a string of private and public entities attesting to actual reserves, said the company's head of strategy Walter Hessert in a phone interview with CoinDesk. 

The New York-based firm – which was recently tapped to source PayPal’s cryptocurrency supply – holds a New York Trust charter. That means every crypto product addition is reviewed by the regulator, Hessert said.

Paxos’ bank accounts are also audited monthly by New Jersey-based accounting firm Withum. Those findings are pushed to Paxos’ API feed, which is then further routed to projects using Paxos’ tokens as collateral.

“Chainlink oracles will accelerate the adoption of Paxos’ [U.S. dollar] and gold-backed tokens in DeFi,” Hessert said in a statement. “With the proof of reserve and price available on-chain, our regulated assets will become more accessible for DeFi users.”


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