USDMD guides · 06EN
Testnet and mainnet: what is simulated
The testnet exists to prove the mechanism in public. Some parts are the real thing; some cannot be real on a test network.
Real
The token and its no-freeze design, the controller's minting and redemption rules, the collateral registry, the multi-source price feed, the hourly proof of reserves with its hashed statements, the timelock, and the public API.
Simulated: the gold
MockXAU stands in for gold. The issuer mints it; nothing backs it. Paxos's testnet PAXG is real test gold on Ethereum Sepolia, and it is listed, but its faucet does not dispense it, so none has been bridged.
Simulated: the hedge
The hedge is planned as a short PAXG perpetual on the Pactol testnet, margined in testnet USDC. Mainnet needs a hedge venue that is not margined in USDC.
Missing until mainnet
A licensed issuer, identity checks at mint and redeem, a custodian and bar list, a monthly independent attestation, an independent audit, and a 7-day timelock with a multisignature proposer.
Note
Anything the testnet shows about gold is a demonstration of the mechanism, not evidence that gold is held.
Nothing on these pages is an offer, a solicitation or a recommendation to buy, sell or hold any asset, in any jurisdiction. Test USDMD is not sold and has no value.