TLDR
- Paxos accidentally minted 300 trillion PYUSD stablecoin tokens on Wednesday evening in a technical error
- The company burned all tokens within 22 minutes by sending them to an inaccessible blockchain address
- The minted amount exceeded global GDP of $117 trillion and was worth more than eight times US national debt
- PYUSD briefly lost its $1 peg with a 0.5% price drop before stabilizing after the burn
- Paxos confirmed no security breach and customer funds remained protected throughout the incident
Stablecoin issuer Paxos made a massive error on Wednesday when it accidentally minted 300 trillion PayPal USD tokens. The mistake was corrected within half an hour.
Blockchain data from Ethereum shows the mint occurred at 7:12 pm UTC. Paxos created the tokens from one of its operational hot wallets.
The company moved quickly to fix the problem. All 300 trillion tokens were sent to a burn address 22 minutes after the initial mint.
Burning tokens means sending them to a wallet address that nobody can access. This permanently removes the tokens from circulation on the blockchain.
Paxos released a statement on X explaining what happened. The company described the incident as an internal technical error during a transfer process.
“Paxos immediately identified the error and burned the excess PYUSD,” the company wrote. The stablecoin issuer stressed that this was not a security breach or hack.
Customer funds were never at risk during the incident. Paxos said it has fixed the root cause of the technical problem.
DeFi Platforms React to PYUSD Mint
The massive mint triggered immediate responses from decentralized finance platforms. Chaos Labs founder Omer Goldberg announced Aave would pause PYUSD trading temporarily.
Aave froze the market as a safety measure. The platform wanted to protect users from any potential issues related to the unexpected transaction.
PayPal USD briefly lost its dollar peg during the chaos. Data from Nansen shows the stablecoin dropped about 0.5% in value.
The price returned to $1 quickly after Paxos completed the burn. Markets stabilized once the excess tokens were removed from circulation.
The scale of the error was enormous. The 300 trillion figure represents more than twice the combined economic output of every country on Earth.
Understanding the Scale of the Error
To put the numbers in perspective, US national debt currently sits at $37 trillion. The accidental mint was more than eight times larger.
Global GDP is estimated at around $117 trillion according to International Monetary Fund data. The PYUSD mint exceeded this by more than 2.5 times.
PayPal USD ranks as the sixth-largest stablecoin by market capitalization. The token has a total supply value of $2.6 billion.
PYUSD sits behind major competitors like Tether’s USDT and Circle’s USDC. It also trails Ethena USDe, Dai, and World Liberty Financial USD in market size.
The stablecoin maintains a one-to-one peg with the US dollar. Paxos issues the token under a partnership agreement with PayPal.
After fixing the error, Paxos resumed normal operations. The company minted 300 million PYUSD tokens as part of its regular business activities.
The incident marks one of the largest accidental mints in cryptocurrency history. It also represents one of the fastest corrections of such an error.
PYUSD launched in 2023 as PayPal’s entry into the stablecoin market. The token operates on both Ethereum and Solana blockchains for user transactions.
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