Recently, the volatility of the crypto market has become increasingly uncertain with changes in the international financial market, and the price trends of Bitcoin, Ethereum, SOL, and other mainstream crypto assets have fallen into a downturn. The market's trading enthusiasm for crypto seems to be shifting from optimism to a bearish state. In stark contrast, international gold prices have been rising, breaking through $3,240 per ounce and continuously setting new historical highs, once again verifying gold's nature as a hedging asset.
In the crypto market, the market value of gold-pegged assets has also been rising, with tokenized gold asset market value breaking through $2 billion on April 11. From a risk hedging perspective, gold-related crypto assets seem to be becoming a new high-quality option. PANews has conducted an inventory of mainstream gold-related trading positions in the current crypto market.
Gold-related trading positions in the crypto market currently include tokenized gold, such as TetherGold (XAUT) or PAXGold (PAXG), which are essentially digital certificates of physical gold ownership, as well as derivative trading using these tokenized gold and stablecoins. This includes spot trading pairs or contract trading pairs of XAUT or PAXG provided by exchanges.
Additionally, some online precious metal traders support cryptocurrency as a payment method when trading physical gold. These gold participation methods vary in risk appetite and fund flexibility.
XAUT and PAXG: Leading Tokenized Gold Projects
TetherGold (XAUT) and PAXGold (PAXG) are currently the two largest market cap varieties in the tokenized gold market. XAUT is issued by Tether, the issuer of USDT, with 1 XAUT corresponding to the ownership of 1 troy ounce of gold from a specific "good delivery" gold bar recognized by LBMA (London Bullion Market Association).
The gold is specifically allocated, and holders can check the unique serial number, purity, and weight of the gold bar associated with their address through the official website. Tether claims that its reserves fully support the issued tokens, with XAUT supported by the gold portion of the reserves. As of April 12, XAUT's total support was 7,667.7 kg of gold, distributed across 644 gold bars, with an XAUT token market value of approximately $797 million.
Compared to traditional gold ETFs or futures, XAUT and PAXG tokenized gold have no custody fees and have a smaller minimum purchase amount.
PAXG's fee structure differs from XAUT. Directly creating or destroying PAXG through the Paxos platform incurs a tiered fee based on transaction volume, while on-chain transfers are charged a 0.02% Paxos fee.
In comparison, XAUT claims no custody fees but charges a 0.25% fee for direct purchase/redemption. This means that for small users, trading PAXG on secondary exchanges may be more cost-effective than directly operating through the Paxos platform, avoiding creation or destruction fees. However, frequent on-chain transfers will incur additional costs for PAXG.
Kinesis with Self-Operated Mint and Quorium's Gold Mine Model
Additionally, tokenized gold products with a market value exceeding $100 million include Quorium (QGLOD) and KinesisGold (KAU). QGLOD's business model is particularly unique, with its held gold essentially being gold mine reserves rather than physical gold. Moreover, although the project claims to have regular gold reserve reports, PANews found that these web pages can no longer be opened. Therefore, the reserve situation of QGLOD cannot be understood.
The information is blurry, contradictory, and lacks key details from third-party independent verification. Especially the concept of "undeveloped reserves" - how it provides stable support for liquidity tokens and how audits and valuations are conducted remain unresolved, bringing great uncertainty and risk to investors.
Furthermore, QGOLD's market data shows some warning signals. Its relatively high market value (around $270 million) is accompanied by abnormally low daily trading volume (around $100,000), concentrated in a few lesser-known exchanges. This severe mismatch between market value, trading volume, and exchange liquidity, coupled with insufficient transparency, makes QGLOD's safety seem unconvincing.
KinesisGold's pricing method differs from PAXG or XAUT, using a model where each token represents 1 gram of gold. Its core differentiation lies in its unique revenue-sharing model. Unlike tokens like PAXG and XAUT that merely track gold prices, KAU returns a portion of the platform's transaction fees to holders in the form of gold (KAU).
However, this revenue is neither fixed nor risk-free, directly depending on Kinesis platform's overall transaction volume and fee income. Additionally, Kinesis has launched a corresponding virtual card, allowing users to directly use KAU for daily consumption, which is another distinguishing feature. In terms of transparency, Kinesis opts for audits every six months and supports physical delivery every 100 grams. Kinesis official data shows that Kinesis operates a 5,600 square meter mint and refinery, KinesisMint, producing high-quality gold and silver ingot products.
In terms of market circulation, XAUT and PAXG remain the most liquid tokenized gold, tradable on multiple mainstream centralized exchanges and DEXs. KAU can be traded on its own KinesisExchange platform and centralized exchanges like BitMart and Emirex, with slightly limited liquidity.
Spot Delivery Payment Positions Are Significant, Gold Tokens Struggle to Break DeFi Barriers
Besides tokenized gold, many traditional precious metal traders also support payment via cryptocurrency. These gold positions are mainly applicable to spot trading, with cryptocurrencies serving only as a payment method, not a fundamental change in business model.
Moreover, such trading methods typically require higher one-time investment thresholds, and many platform trading products are gold coins or gold seals. Beyond the gold's inherent value, users may also need product identification and premium discrimination capabilities.
Apart from trading tokenized gold like PAXG or XAUT, some centralized exchanges offer different gold trading categories. For instance, Bybit provides gold CFDs (Contracts for Difference), which allow traders to speculate on asset price movements without actually owning the asset. This trading is similar to index contract trading in financial markets, where users track gold price trends and place contract orders but cannot ultimately deliver gold spots. Among mainstream centralized exchanges, only Bybit seems to offer such products, but many traditional XAU/USD CFD platforms now accept cryptocurrency deposits, such as FP Markets, Fusion Markets, and easyMarkets. This trading method is more suitable for professional traders familiar with gold forex trading rather than cryptocurrency investors.
Furthermore, despite gold tokens possessing RWA attributes, their adoption on mainstream DeFi lending platforms appears limited. Besides PAXG being stakeable through Morpho, leading protocols like Aave and Compound have not accepted gold tokens as native collateral. This might stem from several factors: first, reliable and decentralized gold price oracles could be challenging, which is crucial for liquidation mechanisms; second, potential regulatory uncertainties; third, compared to ETH or mainstream stablecoins, gold tokens may have relatively lower collateral market demand.
Overall, the most mainstream method in the crypto market's gold asset positions is likely holding high-liquidity gold tokens like PAXG or XAUT. Additionally, while numerous similar tokenized gold products exist, users must consider safety issues behind these assets due to issuer and transparency screening challenges. Directly purchasing physical gold through traditional precious metal traders accepting cryptocurrency payments offers the most direct ownership but comes with higher thresholds and potential product premium issues. In the DeFi realm, gold asset participation remains limited, which might represent the difficulty of RWA assets' depth integrating with on-chain finance.
In the current downward cycle, Bitcoin holders are turning their attention to real gold, which serves as both a testament to the crypto market's maturation and potentially a value counterattack by digital gold into the real world.
