Zach Rynes | CLG
Zach Rynes | CLG
LINK-4.56%
Paxos accidentally minted *300 trillion* in unbacked $PYUSD tokens Funds are safe, just an operational error, excess supply has been burned, 1:1 peg strong But this is a good example of a situation where Chainlink Proof of Reserve would have prevented this entire PR nightmare Specifically, asset issuers can integrate Chainlink PoR into the minting function of their token contract as validation check This prevents the issuance of additional tokens unless Chainlink PoR has first validated there is a sufficient amount of offchain reserves available to maintain 100% collateralization This prevents “infinite mint attacks” where a massive amount of unbacked tokens are minted, putting at risk all the markets that list and support the token
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Paxos
Paxos
At 3:12 PM EST, Paxos mistakenly minted excess PYUSD as part of an internal transfer. Paxos immediately identified the error and burned the excess PYUSD. This was an internal technical error. There is no security breach. Customer funds are safe. We have addressed the root cause.
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