How It Works
Paxos mints USDG 1:1 against USD cash and US Treasury bill reserves, with all assets held in segregated Paxos-custodied accounts regulated by the New York Department of Financial Services (NYDFS). The innovation is in the revenue-sharing model: unlike USDC (where Circle keeps reserve interest) or USDT (where Tether keeps interest), USDG distributes a large portion of reserve yield to network participants who hold or distribute USDG. This creates a commercial incentive for exchanges and wallets to prefer USDG over competitors. Regular reserve attestations are published by Withum.
Backing Type: Fiat-Backed
Fiat-backed stablecoins are collateralized by real-world assets held in bank accounts or custodied trust accounts — typically US dollars, Treasury bills, or cash equivalents. The issuer is responsible for maintaining 1:1 reserves and publishing regular attestations.