The recent detachment of the Pax Dollar (USDP) stablecoin from its peg was not due to any issues with the protocol itself, but rather problems with pricing aggregators, according to a spokesperson from Paxos.
On April 16, the price of the Pax Dollar briefly surged to $1.29 before returning to $1 within three hours of the detachment, as shown by CoinMarketCap data.
According to a spokesperson from Paxos, the detachment occurred during a significant increase in USDP’s market capitalization. The market cap briefly rose from $140 million to $181 million when the coin reached $1.29.
However, at the exact moment the Pax Dollar regained parity with the U.S. dollar, its market capitalization fell back to $140 million. Currently, USDP has a market capitalization of $134 million.
Despite the temporary price fluctuation, the spokesperson assured that USDP will always be redeemable at its fair value through Paxos.
CoinMarketCap data reveals that Paxos’ USDP is currently the 13th-largest stablecoin by market capitalization.
In related news, an unknown trader was liquidated for $529,000 worth of Circle’s USD Coin (USDC) on April 16, shortly after the Pax Dollar surged to $1.18, as reported by on-chain security firm PeckShield.
To avoid similar risks, traders using different platforms are advised to closely monitor the platform’s order book, according to the Paxos spokesperson.
The Pax Dollar has experienced significant price fluctuations on multiple occasions. On March 13, 2020, USDP hit an all-time low of $0.87, and on Nov. 16, 2021, it reached a high of $2.02, according to CoinMarketCap.
In other news, Binance has obtained a cryptocurrency license in Dubai following the departure of its CEO CZ, according to reports.