Users deposit funds into Paxos account and receive BUSD or USDP at a 1:1 rate.

Paxos is a financial technology company that is the principal architect of BUSD & USDP - full-reserve fiat stablecoins that bring US dollar liquidity on-chain.

Paxos is a private company registered in the US. Paxos' investors include OakHC/FT, Declaration Partners, Mithril Capital and PayPal Ventures etc.

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Paxos

# Paxos Fees Methodology

## 1. Overview

Fees are measured as the total economic value generated by the reserve assets backing Paxos-issued stable assets. The yield generated on the underlying reserves, composed of US Treasury Bills and cash equivalents, is captured by this metric. The calculation is applied to PayPal USD, Global Dollar, and Binance USD. Gross interest income generated by the reserve portfolio is represented by these fees before any yield-sharing distributions are executed.

## 2. Data sources

- **Blockchain events**: Circulating supply metrics derived from mint, burn, and transfer events for PayPal USD, Global Dollar, and Binance USD, covering Ethereum, Solana, and other supported chains
- **External data**: End-of-day US Treasury Bill rates and Overnight Bank Funding Rates (OBFR) from the Federal Reserve Bank of New York

## 3. Step-by-step calculation

### Component A: Stable asset circulating supply tracking

- **Purpose**: Gross circulating supply of Paxos-issued stable assets is tracked.
- **Logic**: Daily circulating supply is aggregated for PayPal USD, Global Dollar, and Binance USD. Bridged balances are excluded from the aggregation, and any balance with an undefined origin is treated as bridged and filtered out.
- **Key fields**: `timestamp`, `chain_id`, `product_id`, and `asset_market_cap_circulating`

### Component B: Reserve yield rate determination

- **Purpose**: The daily interest rate applied to the reserve assets is established.
- **Logic**: A single daily rate is determined based on the date. For dates prior to January 2, 2025, the 3-month US Treasury Bill rate is applied. For dates from January 2, 2025 onward, the Overnight Bank Funding Rate (OBFR) from the Federal Reserve Bank of New York is used. Rates for weekends and holidays are carried forward from the most recent available business day.
- **Key fields**: `timestamp` and `rate`

### Component C: Gross reserve yield calculation

- **Purpose**: Daily fees generated by the reserve assets are calculated.
- **Logic**: Daily fees are calculated by multiplying the outstanding circulating supply of each stable asset by its yield-bearing share and the daily interest rate, with the product then divided by 365 to annualize the daily yield. The yield-bearing share is configured as 100% for PayPal USD, Global Dollar, and Binance USD.
- **Key fields**: `outstanding_supply`, `yield_bearing_share`, `rate`, and `fees`

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Total value users pay to use a protocol (gross fees, user-paid fees).

Paxos

Fees

Fees

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