What Is Pax Dollar (USDP)? What is USDP Stablecoin?
In this post, we will take a look at what is Pax Dollar (USDP) and how does it work. This guide should give you brief overview of Pax Dollar stablecoin.
Pax Dollar aka USDP is one of the stablecoins that is getting popular among some exchanges and the asset based DeFi projects. So here in this post we are going to discuss USDP stablecoin in brief.
What is Pax Dollar (USDP)?
Pax Dollar is a fiat-collateralized stablecoin created by Charles Cascarilla and Rich Teo. Pax Dollar is an ERC-20 token based on the Ethereum blockchain. Pax dollar is collateralized 1:1 with the US dollar and is regulated through New York State Department of Financial Services.
Pax dollar has the market cap of $945,851,413 USD and circulating supply of 945,642,940 USDP coins. The USDP tokens are secure, audited and protected. The company behind the token has purchased short term treasury assets to build it's stablecoin reserve. It is currently available in most of the leading exchanges and you can also use UNISWAP with metamask to swap USDP.
How does Pax Dollar (USDP) works?
USDP is another stablecoin built using the ERC-20 token. If you have checked out various stablecoins in the Ethereum ecosystem then you know USDC and Tether being 2 other similar stablecoins on Ethereum. Only difference here being USDP makes use of the short term treasury to hold the peg value through reserves.
USDP is being used to transfer legal assets and the money. Considering it makes use of the smart contracts they can be sent through secure and risk free way. USDP is being used by the exchanges and the traders who want USD backed transactions.
What are benefits of the USDP Stablecoin?
USDP is a stablecoin that can prove to be a good alternative to the USDC and USDT. Some of it's interesting feature benefits are explained below.
- US Dollar Pegged stablecoin: Pax USD makes use of the short term treasury bills to regulate and monitor the USDP to keep it's value 1:1 with USD.
- FDIC Insured & Audited Stablecoin: You can connect your bank account with USDP and then convert your stablecoin when you want. It's legal, secure and protected by govt.
- Good Stablecoin for Travel Industry: Stablecoins usage by travellers make sure that they are safe from the fluctuating forex prices. USDP is a perfect option for those who want to use stablecoin for spending abroad.
There are many other benefits of stablecoins but they kind of apply to most of the stablecoins and USDP being strongly collatarized stablecoin, it's just makes using the PAX Dollar much easier.
What are issues of the USDP Stablecoin?
Though Pax dollar is a good stablecoin like most other stablecoins, you'd find that USDP too has it's set of the flaws. Here are some you may want to check.
- Pax Dollar does not offer anything new in the feature set that other stablecoins don't. So that kind of makes it just another ERC-20 token.
- Limited exchanges and less adoption from the community limits it's growth.
As you can see if the Pax dollar to be replacing Tether and USDC, it has to offer more than what the earlier stablecoin offered. You may want to read about Seigniorage stablecoin if you are interested.
Stablecoins are going to be pretty important in upcoming times as the regulations and the monitoring of the assets in the crypto world would get more tight. Pax dollar despite being similar to Tether and USDC, has barely managed to capture the market and it needs to do a lot more than just being ERC-20 based stablecoin.
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