TL;DR
- Paxos accidentally minted 300 trillion PayPal PYUSD tokens and sent them to an inaccessible address 22 minutes later.
- PYUSD maintained its dollar peg, dropping temporarily by only 0.5%; its market capitalization exceeds $2.3 billion.
- Aave temporarily froze PYUSD trading following the transaction. Paxos confirmed it was an internal technical error that did not compromise customer funds.
Paxos created confusion in the stablecoin market by accidentally minting 300 trillion PayPal PYUSD tokens and burning them minutes later.
PYUSD Survives Paxos’ Error Chaos
The incident occurred today when the platform minted the tokens at 19:12 UTC and sent them 22 minutes later to an inaccessible address, effectively eliminating the entire issuance. Although the nominal value of the tokens reached $300 trillion due to PYUSD’s 1:1 dollar peg, the stablecoin maintained its parity, dropping only 0.5% temporarily. PYUSD’s market capitalization exceeds $2.3 billion, making it the sixth-largest stablecoin after USDT, USDC, USDE, DAI, and USD1.
Chaos Labs founder Omer Goldberg reported that Aave temporarily froze PYUSD trading following what he described as an “unexpected high-magnitude transaction.” Paxos clarified that it was an internal technical error during a transfer and that there was no security breach; customer funds remain intact, and the company confirmed that the root cause has been addressed.
An Accident That Will Go Down in History
$300 trillion exceeds more than twice the global GDP of all countries combined, according to the International Monetary Fund. Historically, the largest token burns have been on a much smaller scale, such as the burning of over 65 million OKB by the exchange OKX in August 2025 to control supply, or the 1.7 trillion BONK burned in December 2024, valued at roughly $50 million at the time.
PYUSD, issued by Paxos and linked to PayPal, remains a solid instrument despite the error. This incident likely serves as a warning to strengthen internal issuance and stablecoin management controls, highlighting the importance of transparency and oversight in these assets.
The episode has been recorded as one of the most peculiar incidents in cryptocurrency history
