Pashov’s Review of Paypal USD Stablecoin
Pashov, an expert in smart contracts security reviews, has reviewed the recently launched stablecoin, Paypal USD (PYUSD), by PayPal. According to Pashov, the stablecoin has an “assetProtection” role that can wipe your balance in two transactions, which he refers to as a “centralization attack vector”. He also mentions that selected development team members will have special roles to execute code functionalities.
Centralization Concerns
Pashov states that similar code functions are present in leading stablecoins like Tether USD (USDT) and Circle USD (USDC). David Schwartz, CTO at Ripple, disagrees with Pashov’s claims, stating that the centralization lies in PayPal being legally obligated to redeem the stablecoin for dollars. Schwartz believes this mitigates the risk.
Other Centralization Attack Vectors
Sasha Hodder, founder of Hodder Law Firm, highlights additional centralization attack vectors found in the Paypal USD stablecoin, such as full KYC, custody by Paxos, and the ability for PayPal to reverse transactions. Hodder compares the stablecoin to a central bank digital currency (CBDC) launched by big tech instead of the government.
Ethereum Supporters Celebrate
Despite the concerns raised, some Ethereum supporters on Twitter celebrate PayPal’s choice to build their stablecoin on the Ethereum Network. They believe it validates the use case for smart contracts blockchain in the leading project by market cap.
Hot Take
The review of Paypal USD stablecoin by Pashov raises concerns about centralization attack vectors and potential risks for users. However, there are differing opinions within the crypto community, with some defending PayPal’s actions and others criticizing the project for its centralization. It remains to be seen how this stablecoin will be received and whether it will gain widespread adoption.
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