Paxos Accidentally Mints $300 Trillion PYUSD Stablecoin in Technical Error

TLDR

• Paxos mistakenly minted 300 trillion PYUSD tokens on Wednesday at 7:12 pm UTC due to an internal technical error
• The entire amount was burned 22 minutes later by sending it to an inaccessible wallet address
• The error amount was worth $300 trillion, exceeding global GDP of $117 trillion and more than twice all countries’ combined economic output
• Aave temporarily froze PYUSD trading as a precaution, and the stablecoin briefly dropped 0.5% before recovering its $1 peg
• Paxos confirmed no security breach occurred and customer funds remained safe throughout the incident

Stablecoin issuer Paxos created an unprecedented error on Wednesday when it accidentally minted 300 trillion PayPal USD tokens. The mistake was quickly corrected within 30 minutes.

The incident occurred at 7:12 pm UTC on Wednesday. Ethereum blockchain data shows Paxos minted the massive amount of PYUSD tokens from one of its hot wallets.

The company sent all 300 trillion tokens to a burn address 22 minutes later. This made them permanently inaccessible and removed them from circulation.

Market Impact and Response

The accidental mint triggered immediate action from DeFi platforms. Chaos Labs founder Omer Goldberg announced that Aave would temporarily freeze PYUSD trades.

The freeze came after what Goldberg called an “unexpected high-magnitude transaction.” Aave took the step as a precautionary measure to protect its platform.

PYUSD maintained most of its dollar peg during the incident. The stablecoin’s price briefly dropped by about 0.5% according to Nansen data.

The price quickly stabilized after Paxos burned the excess tokens. Normal trading resumed once the situation was resolved.

The $300 trillion figure represents an enormous amount in context. It exceeds the entire U.S. national debt of $37 trillion by more than eight times.

The accidentally minted amount also surpassed global GDP. The International Monetary Fund estimates worldwide economic output at around $117 trillion.

PYUSD Position in Stablecoin Market

PayPal USD currently holds the position as the sixth-largest stablecoin. The token has a market capitalization of $2.6 billion.

PYUSD ranks behind major stablecoins including Tether’s USDT and USDC. It also trails Ethena USDe, Dai, and World Liberty Financial USD.

The stablecoin maintains a 1:1 peg with the US dollar. Paxos issues PYUSD on behalf of PayPal under a partnership agreement.

After resolving the error, Paxos continued its normal operations. The company minted 300 million PYUSD as part of routine activity.

The incident represents one of the largest token mints in crypto history. However, it was also one of the fastest corrections of such an error.

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