Paxos Addresses Pax Dollar Depegging, Trader Liquidation
The Pax Dollar (USDP) stablecoin recently lost its peg, causing its price to surge to $1.29 on April 16 before settling at $1.A Paxos representative stated the depegging resulted from pricing aggregator errors, not its protocol.
The depegging occurred during a significant market cap increase for USDP, which briefly rose from $140 million to $181 million when the coin hit $1.29.Despite the temporary price fluctuation, the spokesperson stated that USDP will always remain redeemable at fair value via Paxos.
In a related incident, an unknown trader was liquidated for $529,000 worth of Circle’s USD Coin on April 16, shortly after Pax Dollar surged to $1.18. The Paxos spokesperson advised traders employing different platforms to keep a close eye on the platform’s order book to avoid similar risks.
Pax Dollar has occasionally experienced significant price fluctuations. USDP hit as low as $0.87 on March 13, 2020, and rose as high as $2.02 onNovember 16, 2021.
Temporary depegging can lead to market instability and losses. Paxos remains dedicated to ensuring the stability of Pax Dollar. It attributes the recent incident to external pricing aggregator issues rather than issues with the protocol itself.
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