The Global Dollar Hub now lets borrowers pledge Paxos Labs’ gold-linked PAXGy for loans denominated in USDG or Pax Gold (PAXG). The change gives PAXGy holders a borrowing use for the asset within the hub.
Paxos Labs launched PAXGy in September using a gold-leasing model intended to increase the PAXG represented by each token while a holder’s token count stays constant, though that outcome is not assured.
Gold-price changes can affect PAXGy’s dollar value. Losses from the leasing activity, such as defaults, may cause PAXGy to trade for less PAXG. The borrowing option therefore comes with exposure to both the lending model and changes in gold prices.
