Inside Paxos’ $300 Trillion PYUSD Stablecoin Mistake

Key Takeaways

• Paxos mistakenly minted 300 trillion PYUSD tokens due to an internal error.

• The tokens, worth a notional $300 trillion, were burned within 22 minutes.

• No user funds were affected, and the incident posed no long-term risk.

• PYUSD held its dollar peg, showing resilience in the face of unexpected technical glitches.

• The event highlights the importance of robust internal controls in stablecoin issuance and blockchain operations.

What Happened With PYUSD?

A Technical Glitch On Ethereum

On October 16th, 2025, at 7:12 PM UTC, Paxos minted 300 trillion PYUSD stablecoins, briefly flooding the blockchain with tokens representing a theoretical $300 trillion USD.

Within 22 minutes, the entire sum was sent to a burn address, effectively removing the tokens from circulation.

The 300 Trillion PYUSD Mint

Source: Etherscan

Aave Reacts Quickly

The rapid mint-and-burn prompted Chaos Labs founder Omer Goldberg to announce that Aave would temporarily freeze trading of the PYUSD stablecoin to assess any potential risks.

The sheer scale of the mint raised concerns, even though no direct impact on users was reported.

Paxos Responds: “Internal Error, No Breach”

Official Statement From Paxos

Shortly after the event, Paxos issued a statement via X, clarifying the situation:

“This was an internal technical error. There is no security breach. Customer funds are safe. We have addressed the root cause.”

PYUSD Maintains Its Peg

Despite the magnitude of the error, the PYUSD stablecoin managed to hold its $1 peg, although analytics platform Nansen reported a brief 0.5% price dip immediately following the event.

PYUSD’s Price Immediately After The Mint & Burn

Source: Nansen

PYUSD Stablecoin By The Numbers

• Market Cap: Over $2.3 billion

• Ranking: 6th largest stablecoin (as of October 2025)

• Peg: 1:1 with the US dollar

• Issuer: Paxos, in partnership with PayPal

PYUSD ranks behind industry giants like USDT, USDC, USDe, DAI, and USD1 in terms of market capitalization.

A Mint Bigger Than The Global Economy

To put it in perspective, the $300 trillion accidentally minted is more than double the combined global GDP, according to the International Monetary Fund (IMF).

Other Massive Burns In Crypto History

While this mint-and-burn was accidental, crypto projects have intentionally burned massive token quantities in the past:

• OKX Exchange: Burned over 65 million OKB tokens in August 2025 to limit supply.

• Bonk (BONK): Burned 1.7 trillion tokens in December 2024, though the total value was only about $50 million.

• World Liberty Financial: Burned 47 million tokens in 2025 in an attempt to counter a price slide.

Still, the PYUSD stablecoin burn stands out due to its mind-boggling nominal value, $300 trillion, albeit temporary.

FAQ

What is the PYUSD stablecoin?

PYUSD is a U.S. dollar-pegged stablecoin launched by PayPal and issued by Paxos, designed to facilitate secure and efficient crypto payments.

Why were 300 trillion PYUSD tokens minted?

The tokens were minted due to an internal technical error by Paxos. The issue has been resolved, and the funds were never circulated.

Was there any financial loss or risk to users?

No. Paxos confirmed that no customer funds were at risk, and no security breach occurred.

Did this affect the value of PYUSD?

The stablecoin briefly dropped by about 0.5% but quickly returned to its $1 peg.

Is PYUSD still safe to use?

Yes. Paxos has addressed the error, and Aave’s temporary freeze was a precautionary move. The system remains stable.