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     26 days ago  

    TGLD Safety Features & Benefits

    • Backing: Over-collateralized by permanently staked LEO tokens in LeoStrategy's treasury, plus market-making profits and cross-chain arbitrage. Liquidation preference guarantees 1:100 payout to GLD price (e.g., $3.75 per TGLD if GLD at $375) in dissolution events.
    • Peg Mechanism: Policy-driven APR (3-20%) adjusts dynamically to maintain 1:100 GLD correlation; deviations trigger higher yields to incentivize buying and restore stability. No direct redemptions, but hourly on-chain metrics ensure transparency.
    • User Benefits: Daily rebase yields for income; low volatility as defensive asset; easy arbitrage via GLD's liquid market (high volume, tight spreads, options chain for risk modeling). Built for long-term holding in DeFi (collateral, vaults). Risks: Peg relies on policy/LDO growth belief; potential short-term deviations.
    • Overall Safety: Strong for synthetic exposure but tied to LEO ecosystem health; not redeemable for physical assets.

    PAX Gold (PAXG) Safety Features & Benefits

    • Backing: Each token redeemable 1:1 for physical gold (1 fine troy ounce) stored in regulated vaults (e.g., Brink's), audited monthly by Withum. Fully backed by actual gold, enabling direct redemption for physical delivery.
    • Peg Mechanism: Stable via redemption arbitrage and market trading; no yield but maintains tight peg to gold spot price through Paxos' regulated issuance/redemption process.
    • User Benefits: Transaction-based fees (no holding drag); integrates with DeFi/exchanges for liquidity; acts as digital gold safe haven in volatility. Revenue from trades/redemptions supports operations without eroding value.
    • Overall Safety: High due to physical redemption, NYDFS regulation, and proven audits; minimizes counterparty risk compared to synthetics.

    Comparison: Which is Safer?

    PAXG edges out for safety, offering direct physical gold redemption and stricter regulation, reducing reliance on policy or token ecosystems. TGLD provides robust synthetic safety via over-collateralization and yields but introduces LEO dependency and no physical backing, making it riskier for pure stability seekers. Choose PAXG for conservative gold exposure; TGLD for yield-enhanced DeFi utility.

    Sources: LeoStrategy TGLD docs (Nov 2025); Paxos PAXG overview (Apr 2025).

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