Paxosâ€™ stablecoin tokens have mainly been playing catch-up since the DeFi spike in 2020.
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 (PAXÂ (-0.16%)) and paxos gold (PAXGÂ (-0.42%)) tokens are now available on Chainlinkâ€™s oracle network, according to a blog post shared early with CoinDesk. Chainlink operates as background pricing and data infrastructure forÂ many DeFi projectsÂ and accounts for over 50% of on-chain smart contract calls among oracles, according toÂ DeBank.
Paxosâ€™ 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, stablecoinsÂ daiÂ (+0.18%), usd coin (USDCÂ (-0.16%)) andÂ tetherÂ (USDT, -0.13%)Â make up the lionâ€™s share of stablecoin activity on the Ethereum blockchain (where DeFi apps tend to live), according to data providerÂ DeBank.
The addition of Paxosâ€™ tokens to Chainlinkâ€™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 theÂ $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 companyâ€™s head of strategy Walter Hessert in a phone interview with CoinDesk.
The New York-based firm â€“ which was recently tapped toÂ source PayPalâ€™s cryptocurrency supplyÂ â€“ holds a New York Trust charter. That means every crypto product addition is reviewed by the regulator, Hessert said.
Paxosâ€™ bank accounts are also audited monthly by New Jersey-based accounting firm Withum. Those findings are pushed to Paxosâ€™ API feed, which is then further routed to projects using Paxosâ€™ tokens as collateral.
â€œChainlink oracles will accelerate the adoption of Paxosâ€™ [U.S. dollar] and gold-backed tokens in DeFi,â€ Hessert said in a statement. â€œWith the proof of reserve and price available on-chain, our regulated assets will become more accessible for DeFi users.â€