How much debt can be issued against PAXG as collateral across lending protocols.
Maximum possible exposure to PAXG
$1.012b
$11.45m (max additional borrows against PAXG) + $1.001b (bad debt if PAXG was hacked now)
Fluid
$14.79m at-risk exposure = $3.41m bad debt if hacked + $11.39m additional borrowable against PAXG
Morpho V1
$997.24m at-risk exposure = $997.18m bad debt if hacked + $59,318 additional borrowable against PAXG
Methodology and limitations
Showing collateral exposure for PAXG on onchain. Max Borrowable uses the backend's liquidity-bounded borrow-capacity metric (`collateralMaxBorrowUsdLiquidity`) for the maximum additional USD debt that can be issued against the asset right now. Bad Debt at $0 is the minimum known bad debt if the collateral asset price goes to zero; null rows are excluded from this total rather than treated as zero, so totals may remain lower bounds.
These metrics describe lending exposure only and are not a full protocol risk rating.
This view does not include multisigs, timelocks, audits, oracle incidents, listing discussions, curator reports, or protocol backstops.
Chain-specific drilldown is exact only when the token resolves to a concrete chain:address.
Show exposure details
Each row is one protocol-chain exposure for PAXG as collateral. Bad debt at $0 totals remain lower bounds when a row is marked partial.
Protocol
Chain
Fluid
Ethereum
PAXG0x45804880de22913dafe09f4980848ece6ecbaf78
$11.39m
$3.41m
Morpho V1
Ethereum
PAXG0x45804880de22913dafe09f4980848ece6ecbaf78
$59,316
$997.18m
Morpho V1
Polygon
PAXG0x553d3d295e0f695b9228246232edf400ed3560b5
$2.32
$1.17
Risk Timeline
Risk-management actions published about PAXG by tracked risk managers and governance contributors, newest first.
PAXG exceeds the proposed $200M OI threshold for commodities with $205M aggregate OI across eligible exchanges, benefits from gold's low 15% annualized volatility compared to crypto assets, and features healthy holder distribution with top 10 wallets at 34% of supply. Its NYDFS regulation, monthly attestations, tighter spreads (0.05–0.15%), deeper Deribit options market, and lower fee structure position it as the stronger near-term candidate for onboarding as USDe backing.
Growing demand for tokenized gold collateral aligns with Spark’s offchain lending framework, supported by its institutional borrower focus and favorable risk profile.
Tokenized physical commodities like PAXG (gold-backed) are explicitly excluded from securities treatment under the bill, distinguishing them from tokenized equities and clarifying CFTC oversight for spot markets.
Token-specific prices like PAXG are replaced with abstract XAU gold prices for stability; the timelock module tracks deviations from market gold prices and activates them if prolonged, protecting against manipulations while capturing structural shifts.
PAXG, a Paxos-issued tokenized gold asset, has sufficient liquidity and redemption mechanisms to serve as collateral on Aave v3 Ethereum. It offers low correlation to crypto markets, enabling onboarding with conservative LTV and caps to manage oracle and custody risks.
PAXG is issued by NYDFS-regulated Paxos Trust Company with physical gold backing in LBMA-accredited vaults, verified by monthly attestations from Withum Smith+Brown ensuring 1:1 reserves. Its regulatory framework provides asset segregation and insurance coverage, supporting safe integration as collateral despite moderate DEX liquidity concentration in Uniswap V2 and a 3/20 multisig for upgrades.
PAXG is a gold-backed digital currency issued by NYDFS-approved Paxos, with a multi-year on-chain track record as a trusted entity. Onboarding it diversifies Aave's collateral options, allowing users to leverage gold exposure while boosting protocol liquidity and attracting mainstream adoption.
The oracle for the new PAXG/USDC market was incorrectly set up by the provider, allowing users to borrow more USDC than warranted against PAXG collateral. Exposure was limited to 4% of vault allocation, the over-borrow was repaid in full with no funds lost, and the market is now paused to prevent further use.
PAXG is a gold-backed token issued by regulated Paxos (NYDFS), with physical gold stored in LBMA London and redeemable under specific conditions; no management fees and recent removal of transfer fees make it suitable for DeFi integration. Conservative 77% LLTV accounts for historical gold price volatility, including a max daily drop of 13.2% since 1978, using Chainlink XAU/USD oracle to mitigate brief deviations from spot gold.
