I think it’s a good idea to add Paxos Gold (PAXG) as collateral to CREAM finance platform. PAXG is issued by a reputable company (Paxos) and is backed 1-1 by physical gold. The usage and trading volumes have expoded over the past month. No lending platform has listed PAXG yet and CREAM could be the first one.
Add Paxos Gold (PAXG) as a collateral asset
No collateral on this planet is more stable than the physical gold.
PAXG is backed 1-1 by allocated physical gold in a vault. It is managed by Paxos. Paxos runs a big exchange - itBit. Paxos manages crypto stuff for PayPal’s. PAXG is widely considered safe. It can be priced to the liquid Binance market or global gold market because it’s backed 1-1 by physical gold. Maker DAO has already voted in PAXG as collateral but they are still waiting till it’s implemented. CREAM could be faster.
There are millions of dollars posted as collateral on CREAM while FED keeps destroying their value. Being able to post gold as collateral, with literally 0 fees for holding PAXG tokens backed by gold in the vaults, would be an attractive alternative. I am not aware of any other platform that holds gold in a vault for you and doesn’t charge yearly fees.
Current market cap: $249m
24 Hour Trading Vol reported by Coingecko: $24m
Market cap has exploded from $108m to $249m between 6th and 20th of May 2021 and keeps growing.
There is a small complication in the form of the 0.02% fee on each transfer (“fee on transfer” ERC20). This low fee is reasonable, considering how expensive it is to manage physical gold in the vault. There are liquid PAXG markets on Uniswap V2 which work ok despite the fee on transfer