Paypal’s PYUSD: Unpacking the Smart Contract, ‘Freeze’ Function, and What It Means for Centralized Stablecoins
Paypal and Paxos recently launched the new stablecoin PYUSD, which has generated a lot of interest in the crypto community. Here are the key points you need to know about the PYUSD smart contract and its implications:
- Several fake PYUSD tokens were created and introduced to decentralized exchanges before the official release of the smart contract.
- Currently, there are approximately 26,905,005.66 PYUSD in circulation across eight wallets, with the top two holders owning 99.99% of the supply.
- The PYUSD contract has a “freeze” option that allows an asset protection role to freeze a specific address, restricting token transfers and receipts.
- An assigned asset protection role can unfreeze a frozen address, removing any limitations imposed by the freeze.
- The contract also includes a “wipeFrozenAddress” function that enables confiscation of tokens from a frozen address by setting its balance to zero.
Many stablecoin providers argue that these features help with regulatory compliance and addressing suspicious activities. It’s worth noting that other stablecoins like USDT, USDC, and USDP also have similar address-freezing capabilities.
The PYUSD contract uses an outdated Solidity version 0.4.24 and can adjust the total token supply and pause/unpause transfers and approvals. While PYUSD is centralized and regulated, it does not pose a significant threat to decentralized and permissionless crypto assets like bitcoin.
Hot Take
While PYUSD may not disrupt the decentralized crypto space, it could pose a challenge to centralized stablecoins. The introduction of the PYUSD stablecoin by Paypal demonstrates the growing interest and involvement of traditional financial players in the crypto industry.
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