- •Paxos swiftly resolves minting error after creating 300 trillion PYUSD.
- •DeFi platforms react cautiously as Paxos burns excess stablecoins quickly.
- •PYUSD regains stability as Paxos confirms no breach or fund loss.
Paxos, the issuer of PayPal USD (PYUSD), faced a rare technical glitch that led to the accidental minting of 300 trillion PYUSD tokens. The incident, detected at 3:12 p.m. ET, was swiftly contained within 30 minutes, preventing any market disruption or loss of funds.
According to Paxos, the error originated from one of its hot wallets, which mistakenly sent a minting instruction to PayPal’s PYUSD smart contract. The firm quickly identified the problem and burned the excess tokens to restore the correct supply balance. Paxos confirmed in an X post that there was no security breach and that customer funds remained completely safe.
Etherscan data shows that the erroneous minting involved tokens worth $300 trillion, an amount that far exceeds global economic output. However, the company acted promptly, and the digital assets were destroyed before they could enter circulation. Market participants reacted cautiously, with Aave temporarily freezing PYUSD markets to mitigate potential risks.
Swift Containment Prevents Wider Market Impact
Despite the enormous scale of the mistaken mint, market conditions stabilized quickly. PYUSD briefly slipped from its $1 peg but regained parity soon after the burn was completed. The rapid response from Paxos and DeFi platforms ensured the issue had no lasting impact on trading or liquidity.
Paxos clarified that the event resulted purely from a technical malfunction rather than malicious activity. The company stated that it has addressed the root cause to prevent future occurrences. Following the incident, Paxos resumed normal operations, including the routine minting of 300 million PYUSD tokens.
Currently, PYUSD ranks as the sixth-largest stablecoin, with a market capitalization of $2.6 billion. The swift recovery demonstrated the resilience of Paxos’s infrastructure, highlighting the importance of strong operational controls in the growing stablecoin market.