Which sounds better: I2S or Coax.

The devil is in the details (implementation). I2S does not have standard protocol established between manufacturers so handshake is an issue unless you’re using the two components from same manufacturer. Case in point, AQUA HiFi and Rockna, one uses RJ45 and other HDMI for I2S. In this case, I2S far outweighs Coax, AES and USB in terms of SQ. 

lalitk

I will be using PS Audio Perfectwave Transport and DAC.  Thanks!

Paul from PS Audio is pretty clear that they consider the I2S to be superior.  Any reason to question them if you trust them enough to own their equipment?

The quality of the components and implementation is everything. Early versions on a new connection standard is something to be considered as a requirement years after it becomes a standard. So, for today I would concentrate on the sound quality of the component… and use the best connectors available… AES or SP/DIFF.

If the DAC is designed properly, the interface will make no difference. I2S is another way to extract coin from your pocket.