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 reported by CoinMarketCap.
According to the spokesperson, the detachment occurred during a significant increase in the market capitalization of USDP. The coin briefly rose from a $140 million market cap to a $181 million market capitalization when it reached $1.29.
The market capitalization of USDP fell back to $140 million at the same time it regained parity with the U.S. dollar. Currently, USDP has a market capitalization of $134 million.
Despite the temporary price fluctuation, the spokesperson assures that USDP will always be redeemable at its fair value through Paxos.
According to CoinMarketCap data, 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.
Traders using different platforms are advised to closely monitor the platform’s order book to avoid similar risks, according to the Paxos spokesperson.
The Pax Dollar has experienced significant price fluctuations on multiple occasions. It hit an all-time low of $0.87 on March 13, 2020, and reached as high as $2.02 on November 16, 2021, according to CoinMarketCap.
In other news, Binance has obtained a cryptocurrency license in Dubai following the departure of its CEO, CZ, according to reports.