Gold-backed crypto tokens
With gold-backed cryptocurrencies we see the attempt to create a true, digital bearer asset that is backed by gold or other precious metals – right down to having bars in a vault correlated by their serial numbers to circulating tokens.
These systems try to combine store-of-value (precious metals backed tokens) – that can be redeemed by the bearer, with payment systems that leverage the underlying blockchain mechanics to transfer value at a distance.
Some of these emergent gold-backed tokens are listed below:
Lode
Swiss-based Lode AG has created AUX token – backed by gold, AUG which is silver backed and their own native LODE token. They are al ERC-20 tokens running on the Avalanche blockchain.
AUX Token: Gold-backed
Each AUX token is backed by one-milligram of “vaulted, audited, and insured” 99.99% (bullion grade) gold. AUX-tokens are redeemable (minimum redemption size is 10oz).
AUG Token: Silver backed crypto
The AUG token is the same concept as the gold-backed AUG, above – except each unit represents one gram of investment grade silver. The minimum redemption size here is 100oz.
LODE Token: The Native Cryptocurrency
The LODE token serves as the native cryptocurrency within the Lode AG ecosystem. Unlike AUX and AUG, which are backed by their respective precious metal, the LODE token represents a stake in the Lode Project itself. The LODE token is akin to a “governance” token seen in other projects and DAO’s (Decentralized Autonomous Systems) – it also earns a stake in the fees generated by the ecosystem.
Pax Gold by Paxos
PAXG is an ERC-20 token that is backed by physical gold reserves, stored in London vaults. Each token is equivalent to one fine troy ounce of a London Good Delivery gold bar.
Paxos is a stablecoin operator, of which PAXG is just one of their offerings. Their other products are PYUSD – the Paypal USD stablecoin and PUSD, their own USD stablecoin implementation.
They were the sponsor of Binance’s BUSD stablecoin, in 2023 they ceased activities amid regulatory uncertainty in the US.
Kinesis
Kinesis Money, was founded by Thomas Coughlin in 2018. They also have both a gold token (KAU) and a silver one (KAG). The KAU is backed by one gram of physical gold, while the KAG by one ounce of silver. Gold can be redeemed in 100g minimum’s, silver in 200oz – there are six “redemption hubs” dispersed globally.
Their vaults are distributed globally – and the tokens are exchangeable only via the Kinesis exchange platform, which the company operates.
There is also an ecosystem token: the Kinesis Velocity Token (KVT) which is earn 20% of the system fees.
The KAU and KAG tokens also earn yields by being awarded 6% of the platform transaction fees.
KAU, KAG and KVT are all only available via their proprietary exchange platform.