Paxos Spokesperson Attributes USDP Stablecoin's Price Flux to Pricing Aggregators
Summary:
The recent Pax Dollar (USDP) stablecoin depegging, which saw its price temporarily rise to $1.29, was due to issues with pricing aggregators, not the protocol per se, according to a Paxos spokesperson. The instability coincided with a market cap increase for USDP, from $140 million to $181 million. Despite transient price fluctuation, Paxos assures customers can always redeem USDP at fair value. Presently, USDPis the 13th largest stablecoin by market cap.
A Paxos representative attributed the recent disconnection of the Pax Dollar (USDP) stablecoin from its standard price to irregularities with price trackers, and not issues with the protocol itself. On April 16, the price of the Pax Dollar temporarily escalated to $1.29, before normalising to $1 within the span of three hours post detachment, as per data from CoinMarketCap.
The representative explained to Cointelegraph that the price spikes in specific markets, which inadvertently affected USDP's price on price tracking systems, was due to the platforms extracting price data from trading venues. However, Paxos has no authority over these markets or the trading activities they carry out.
As per CoinMarketCap, the uncoupling transpired during a substantial surge in USDP's market cap, which momentarily rose from $140 million to $181 million when the coin reached $1.29. At the precise moment it re-established equivalency with the U.S. dollar, USDP's market capitalization reduced back to $140 million. Currently, USDP holds a market capitalization of $134 million.
Regardless of the fleeting price variation, customers can always exchange USDP at fair value through Paxos, stated the spokesperson, highlighting that Paxos always assigns a value of $1 to USDP. Hence, customers can consistently generate and exchange USDP via Paxos for $1.
Paxos' USDP ranks 13th amongst the largest stablecoins by market capitalization, based on data from CoinMarketCap.
In an incident related to the depegging, a trader was liquidated for $529,000 worth of Circle's USDC on April 16, mere moments after the Pax Dollar swelled to $1.18. An April 17 post by blockchain security company PeckShield registered the event. As a precaution, traders operating across various platforms have been urged by the Paxos spokesperson to scrutinize the platform's order book to mitigate similar risks.
The Pax Dollar has withstood considerable price variations on multiple occasions. USDP hit an all-time low of $0.87 on March 13, 2020, and hit a high of $2.02 on Nov. 16, 2021, as per CoinMarketCap.
Published At
4/18/2024 1:05:25 PM
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