The recent unpegging of the Pax Dollar (USDP) stablecoin was not due to any issues with the protocol itself, but rather problems with pricing aggregators, according to a spokesperson from Paxos.
According to data from CoinMarketCap, the price of the Pax Dollar briefly surged to $1.29 on April 16 before returning to $1 within three hours of the unpegging.
The spokesperson explained to Cointelegraph that the unpegging occurred during a significant increase in the market capitalization of USDP. The coin’s market cap briefly rose from $140 million to $181 million when its price reached $1.29.
The market capitalization of USDP dropped back to $140 million at the exact moment it regained parity with the U.S. dollar. 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.
According to CoinMarketCap data, Paxos’ USDP is currently the 13th-largest stablecoin based on 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 order book to avoid similar risks, according to a spokesperson from Paxos.
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 November 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 CEO Changpeng Zhao, as reported.