Key Takeaways

• Stablecoin issuer Paxos mistakenly minted 300 trillion tokens of PayPal’s PYUSD stablecoin, creating an amount more than double the entire global GDP.

• The 300 trillion PYUSD were minted and then entirely burned by sending them to an inaccessible address just 22 minutes later.

• Paxos assured users that the incident was an “internal technical error” with “no security breach,” and that customer funds remained safe, though the sudden high-magnitude transaction briefly caused a DeFi protocol, Aave, to temporarily freeze PYUSD trades.

Trillions of PYUSD Mistakenly Minted in a Blockhain Glitch

The crypto community was momentarily stunned after blockchain data revealed that stablecoin issuer Paxos had accidentally minted a staggering 300 trillion tokens of the PayPal USD (PYUSD) stablecoin.

The value of this colossal amount, pegged 1:1 to the US dollar, was equivalent to over $300 trillion, a sum that eclipses the Gross Domestic Product of every nation on earth combined.

The 22-Minute Multi-Trillion Dollar Error

The “fat-finger” event occurred on Wednesday, with Ethereum blockchain data showing the 300 trillion PYUSD minted at 7:12 pm UTC. Critically, the error was swiftly detected and corrected. Just 22 minutes later, the entire minted supply was effectively removed from circulation by being sent to a designated burn address, an inaccessible wallet.

Following the unprecedented transaction, a major lending protocol, Aave, temporarily froze PYUSD trades as a cautionary measure due to the “unexpected high-magnitude transaction,” as confirmed by Chaos Labs.

Paxos Assures Community and Peg Integrity

In a quick response to quell potential panic, Paxos issued an X post acknowledging the event. The company confirmed it had “mistakenly minted excess PYUSD as part of an internal transfer,” clarifying that the event was purely an “internal technical error” and not a security breach.

Paxos emphasized that “Customer funds are safe” and the root cause had been addressed. Despite the brief chaos and the massive scale of the accidental mint, PYUSD successfully maintained its dollar peg throughout the incident, though its price briefly dipped by a negligible amount, illustrating the robust mechanisms and quick reaction time of the issuer.

Final Thoughts

Paxos’s accidental mint and immediate burn of $300 trillion in PYUSD highlights the human element and technical risks even in the most tightly controlled stablecoin operations. While the rapid correction prevented any catastrophe, the event serves as a vivid reminder of the sheer magnitude of funds that can be moved and the necessary vigilance required in the automated world of blockchain finance.

Frequently Asked Questions

Did the accidental mint affect the PYUSD stablecoin’s value?
PYUSD maintained its dollar peg, though its price briefly dropped by about 0.5% immediately following the news.

Why was the amount burned so quickly?
Paxos detected the error, which was part of an internal transfer, and immediately sent the excess tokens to a burn address to remove them from circulation.

Was this a security breach?
No, Paxos confirmed it was an “internal technical error” and explicitly stated there was no security breach, with all customer funds remaining safe.