Is Paxos about to settle the world’s debt with this $300T mint?

Key Takeaways

What caused the $300 trillion PYUSD mint?

Paxos accidentally minted 300 trillion PYUSD due to an internal technical error during a transfer process, not a hack.

How did platforms respond?

Aave temporarily froze PYUSD lending markets as a precaution.

A massive—but short-lived—mint of 300 trillion PYUSD briefly appeared on Ethereum today, sparking confusion and humor across Crypto Twitter. Paxos later confirmed it was the result of an internal error.

Blockchain data from Arkham shows a transaction from the Paxos hot wallet to PayPal’s PYUSD contract.

There was a mint of the equivalent of roughly $300 trillion in stablecoins before the amount was immediately burned. 

Source: X

The move prompted Aave to temporarily freeze PYUSD markets as a precaution while the issuer investigated.

Paxos confirms error

At 3:12 PM EST, Paxos acknowledged the mint on X, saying the incident was caused by an internal technical error during a transfer process.

“Paxos mistakenly minted excess PYUSD as part of an internal transfer… There is no security breach. Customer funds are safe,” the company posted.

The mint was fully reversed, with on-chain data confirming a zero net increase in PYUSD supply.

Aave and PayPal respond

Omer Goldberg, PayPal’s head of blockchain, reassured users that PYUSD remains fully backed 1:1 with U.S. dollars.

He said the “300 trillion” mint was subsequently burned and that Aave had frozen PYUSD lending markets to ensure transparency while confirming system integrity.

Source: X

Aave’s development arm, BGD Labs, issued a governance update stating the over-minting appeared to be “an operational mistake,” emphasizing that the protocol remains perfectly safe.

Community reaction: jokes and red flags

The minting error quickly dominated crypto Twitter, blending humor with unease. Jokes circulated about the intern having a “fat finger” 

Yet beneath the laughter, some users voiced serious concerns about the implications of a single entity having the ability to mint or burn massive amounts of stablecoins at will.

Also, critics questioned how such an event could occur if PYUSD was fully backed and tightly audited.

This served as a reminder that transparency in reporting doesn’t always equate to decentralization of control. 

The general sentiment was that while the system proved resilient this time, it exposed uncomfortable truths about the power dynamics behind supposedly “stable” digital money.