DeFiPrime Deep Dive Report: Tokenized Gold Trading Volume Reaches $178 Billion; On-Chain Precious Metals Market Outlook for 2026
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DeFiPrime Deep Dive Report: Tokenized Gold Trading Volume Reaches $178 Billion; On-Chain Precious Metals Market Outlook for 2026
The $32 trillion gold market is moving on-chain.
Navigating Web3 tides with focused insightsAuthor: Nick Sawinyh
Translated by TechFlow
TechFlow Introduction:
Amid geopolitical volatility in 2026, tokenized real-world assets (RWAs) have evolved from experimental concepts into a foundational industry. This article provides a detailed overview of the current tokenized gold market—valued at over $5.1 billion—as well as the surging tokenized silver market and the emerging on-chain adoption of industrial metals.
The piece not only compares competitive dynamics among major players such as Tether Gold (XAUt) and Pax Gold (PAXG), but also delves into how high-performance networks like Solana and Hyperliquid are reshaping metal derivatives trading. For investors seeking inflation-resistant assets in the Web3 era, this serves as an indispensable industry blueprint.
Full Text Below:
The convergence of precious metals and blockchain technology reached an inflection point in 2026. What began as an experimental concept has matured into a multi-billion-dollar market, fundamentally transforming how investors gain exposure to gold, silver, and other metals. The tokenized gold market alone now exceeds $5.1 billion in market capitalization, while the broader tokenized commodities sector currently boasts over $4.4 billion in total value locked (TVL).
This shift is driven by multiple forces: gold prices hovering near $5,000 per ounce; silver’s extraordinary rebound of over 140% in 2025, pushing its price above $90 per ounce; and blockchain infrastructure finally achieving institutional-grade reliability. For investors seeking safe-haven assets amid geopolitical uncertainty, tokenized metals offer the best of both worlds—the timeless value of physical commodities, combined with the efficiency, accessibility, and programmability of digital assets.
This guide explores everything you need to know about tokenized metals in 2026: key players, on-chain markets, DeFi opportunities, perpetual futures, and where this rapidly evolving market is headed.
The Tokenized Gold Market
Market Overview
Tokenized gold remains the dominant category within tokenized metals, with two giants controlling approximately 89–95% of market share: Tether Gold (XAUt) and Pax Gold (PAXG).
Growth has been explosive: tokenized gold trading volume hit $178 billion in 2025—surpassing all U.S.-listed gold ETFs except one. This represents a 227% year-on-year increase from 2024, when market capitalization stood at roughly $1 billion.
Tether Gold (XAUt): Market Leader
XAUt has become the largest tokenized gold asset, backed by over 375,000 ounces of LBMA-certified gold stored in Swiss vaults—equivalent to more than 12.7 metric tons of physical gold. Issued by Tether’s subsidiary TG Commodities, each token represents one troy ounce of pure gold.
Dune Analytics for Tether Gold (XAUt)
Core Features:
- Accounts for 75% of tokenized gold trading volume in 2025
- Offers yield-generating options via DeFi integrations
- Multi-chain support (Ethereum, Avalanche)
- Grants direct ownership of allocated physical gold, with serial-number verification
The token gained particular attention during periods of geopolitical tension. In January 2026, amid what analysts termed a “triple-threat” crisis—encompassing Greenland sovereignty tensions, Denmark’s liquidation of U.S. Treasuries, and Japanese fiscal instability—XAUt surged past $5,100, rising nearly 10% since the start of the year.
Pax Gold (PAXG): Institutional Choice
PAXG is issued by Paxos Trust Company under regulatory oversight from the New York State Department of Financial Services (NYDFS). It is the second-largest tokenized gold asset, with a market cap of approximately $2 billion and a circulating supply of around 380,000 tokens.
Key Advantages:
- Fully compliant under NYDFS regulation
- Undergoes independent audits monthly
- Supports redemption for physical bullion or cash
- Backed by London Good Delivery standard gold bars held in LBMA-certified vaults
PAXG attracts a distinct market segment: institutions, asset managers, and compliance-oriented investors who prioritize regulatory clarity. While its trading volume typically trails XAUt, PAXG enjoys higher participation among entities requiring transparent reporting frameworks.
Kinesis Gold (KAU)
Kinesis Gold employs a unique model that transforms physical gold into a yield-bearing digital currency. Unlike XAUt and PAXG—which represent one troy ounce each—KAU represents one gram of gold. The platform offers a full monetary system, including the Kinesis Mastercard, usable anywhere accepting the network, and passive yield derived from transaction fees within the Kinesis Monetary System.
Matrixdock Gold (XAUM)
Matrixdock Gold is a new entrant backed by crypto financial services firm Matrixport. XAUM distinguishes itself through multi-chain availability (BNB Chain, Ethereum, Sui) and integration with Matrixport’s extensive suite of crypto-native financial products.
How Tokenized Gold Works
Tokenizing physical gold follows a structured, multi-step process designed to ensure transparency, security, and compliance:
- Acquisition and Custody: Physical gold is procured and stored in audited vaults (typically in London, Switzerland, or Singapore) by institutional custodians such as Brinks or Loomis, usually with comprehensive insurance. Each bar receives a unique serial number and is verified to meet LBMA Good Delivery standards.
- Minting Tokens: Smart contracts on blockchains like Ethereum record ownership. Each token corresponds to a specific quantity of gold. Tokens remain cryptographically linked to specific bars bearing verifiable serial numbers. These links are stored either on-chain or in a verifiable off-chain database, enabling token holders to trace ownership back to specific physical assets.
- Price Oracles and Market Making: Token prices are maintained via oracle networks such as Chainlink, which track spot gold prices from COMEX, LBMA, and major precious metals dealers. These oracles provide price feeds enabling automated market makers (AMMs) to sustain liquidity and facilitate near-instant price discovery on decentralized exchanges.
- Redemption: Holders may redeem tokens for physical gold or cash value, though minimum redemption thresholds typically apply. Physical withdrawal generally starts at one full bar (approx. 400 troy ounces). Cash redemptions accommodate smaller amounts, with fees ranging from 0.5% to 2%, depending on the issuer.
Tokenized Silver and Beyond
The Silver Surge
Silver is one of the top-performing assets in 2026. Following a year-on-year surge exceeding 140% in 2025, spot silver prices remained robust early in 2026—breaking above $90 per ounce and briefly approaching $100. Driven by investor demand, supply constraints, and industrial consumption (e.g., solar panels, electronics), global silver market capitalization has climbed into the trillions of dollars.
Though smaller than gold’s tokenized market—currently around $420 million—the tokenized silver market is growing steadily. Kinesis Silver (KAG), with a market cap of approximately $414 million, leads the space.
How Tokenized Silver Works
Tokenized silver aims to provide crypto users with direct exposure to silver prices, typically implemented through several models:
- Physically fully collateralized tokens: Each token is backed by physical silver stored in vaults (e.g., Kinesis Silver).
- ETF-pegged tokens: Blockchain representations of traditional financial silver ETFs (e.g., Ondo’s tokenized SLV).
- Fractional tokens denominated in grams: Designed to lower entry barriers and improve accessibility for retail investors.
Kinesis Silver (KAG): Industry Leader
Kinesis Silver (KAG) adopts a distinctive model converting physical silver into a yield-bearing digital currency. Its core features include:
- 1:1 Full Collateralization: Backed 1:1 by physically allocated and audited silver held across a global vault network.
- Passive Yield: Yield is derived from revenue sharing of transaction fees within the Kinesis Monetary System.
- Strong Payment Utility: Spendable globally via the Kinesis Mastercard at any merchant accepting the network.
- Rigorous Compliance Audits: Subject to independent physical audits twice yearly by leading inspection experts.
Silver’s dual role—as both a precious metal and an industrial raw material critical to solar panels, electronics, and medical devices—makes it highly attractive to investors seeking diversification beyond purely monetary metals.
Emerging Metals: Platinum, Palladium, and More
While gold and silver dominate current tokenization efforts, infrastructure is paving the way for a broader commodities revolution:
- Platinum: Critical for automotive catalytic converters and hydrogen fuel cells. Platinum tokenization is gaining momentum via platforms like Wealth99 and dedicated protocols. Each token typically represents fractional ownership of LBMA-certified platinum bars.
- Palladium: Widely used in automotive applications and green energy. Tokenized palladium enhances liquidity and accelerates settlement in traditionally illiquid markets.
- Industrial Metals: As of 2025, tokenized industrial metals—including copper, lithium, nickel, and aluminum—have a combined market cap of approximately $75 million, positioning them as the next frontier of RWA tokenization.
- Rare Earth Elements (REEs): Pilot projects targeting REEs—vital for EV batteries and renewable energy infrastructure—are emerging, though regulatory and custody challenges remain.
Currently, Ostium Labs is the only platform enabling on-chain trading of platinum and palladium.
Ethereum: The Dominant Public Chain
Ethereum remains the primary chain for tokenized gold assets such as PAXG (Pax Gold) and XAUt (Tether Gold), thanks to:
- Deep liquidity pools.
- Mature DeFi infrastructure, including Uniswap, Aave, and Compound.
- Institutional familiarity.
- Integration with Chainlink oracles delivering reliable metal price feeds.
Expansion Across EVM Chains
The tokenized metals market is increasingly multi-chain, with assets available across multiple networks:
- Avalanche: Offers low-fee options for XAUt and XAGx silver tokens, plus subnet-based scaling solutions for institutional use cases.
- BNB Chain: Expansion of Matrixdock Gold (XAUM) and Ondo targets Asian markets and Binance ecosystem users.
- Sui: Emerging on-chain commodity projects leveraging Move language and parallel execution capabilities.
- Mantle: Ondo committed $29 million to USDY integration, targeting institutional treasury use cases.
Solana: A High-Throughput Alternative
By early 2026, Solana had become a central hub for real-world asset (RWA) tokenization, with non-stablecoin RWAs surpassing $1 billion in total value. The network’s high throughput (sub-second finality) and low transaction costs make it ideal for tokenized commodities.
Ondo Finance on Solana: In January 2026, Ondo Finance launched over 200 tokenized assets on Solana—including equities, ETFs, bonds, and commodities. This expansion includes:
- Exposure to gold and silver ETFs (equivalent to GLD and SLV).
- Commodity-linked instruments.
- 24/7 round-the-clock trading.
- Near-instant settlement.
Since its debut in September 2025, Ondo now accounts for over 65% of all tokenized RWAs on Solana, with platform TVL exceeding $460 million and cumulative trading volume surpassing $6.8 billion.
Other Notable Solana Projects:
- DeFiCarrot: Offers leveraged TURBOGOLD products.
- xStocksFi: Provides $GLDx tokens for on-chain gold exposure. ()
Derivatives Market: Perpetual Futures for Metals
Binance Gold Perpetual Contracts
In January 2026, Binance launched a landmark product: TradFi perpetual contracts for gold (XAUUSDT) and silver (XAGUSDT). This marks a pivotal bridge between traditional finance and crypto infrastructure.
Contract Specifications:
- Settlement: USDT margin
- Leverage: Up to 50x
- Trading Hours: 24/7
- Pricing Mechanism: Composite index price from multiple providers; off-hours mark price smoothed using EWMA (exponentially weighted moving average).
- Regulation: Offered via Nest Exchange Limited, regulated by the Abu Dhabi Global Market (ADGM) FSRA.
Market response was overwhelmingly positive—analysts estimate commodity-linked derivatives accounted for roughly 15% of Binance’s total futures volume within days of launch. Over 80,000 users joined waitlists during testing, and single-day volume for the XAU/USD pair alone exceeded $100 million.
“Important Note: These contracts do not represent ownership of physical metal—they are purely price-tracking derivatives.”
Other CEX (Centralized Exchange) Products
Multiple centralized exchanges now offer precious metals perpetual contracts:
DeFi Perpetual Contract Platforms
The decentralized perpetual contract market has exploded, reaching $1 trillion in total trading volume in Q4 2025 alone.
Hyperliquid Perpetuals: Gold, Silver, Copper
Hyperliquid has rapidly established itself as a dominant force in decentralized perpetual contract trading. The platform captures 69% of DEX daily active users, achieves weekly trading volume of $40.7 billion, and maintains open interest (OI) of $9.57 billion—making it one of the most liquid venues in the industry.
At Hyperliquid’s core lies its custom Layer-1 chain, HyperCore, engineered specifically for speed and reliability:
- Sub-second transaction finality
- Processing up to 200,000 orders per second
- Fully on-chain order book
- Seamless MetaMask integration
Its distinguishing feature is the HIP-3 framework, enabling permissionless listing of traditional financial assets—including commodities:
- Gold: Tokenized contracts for PAXG and XAUt have become mainstream, frequently ranking among the top ten by 24-hour volume.
- Silver: Perpetual contracts show exceptional activity, regularly surpassing $1 billion in daily volume.
- Copper: Provides exposure to industrial metals, enabling traders to access broader markets.
This expansion into tokenized commodities underscores Hyperliquid’s vision: building a fully decentralized marketplace for both crypto-native and TradFi derivatives—bringing liquidity, speed, and accessibility to markets once reserved exclusively for institutions.
GMX: Trading XAUt Gold
GMX is a decentralized spot and perpetual exchange operating on Arbitrum and Avalanche, emphasizing low fees and oracle-based pricing.
Features: Offers perpetual-style trading without expiry dates, supported by deep liquidity from GM pools to keep XAUt prices closely aligned with spot gold.
Ostium Perps
Ostium Labs is pioneering the next generation of RWA-centric perpetual contract markets, offering traders decentralized access to real-world assets—including precious and industrial metals.
The platform’s infrastructure is purpose-built for speed, transparency, and efficiency, supporting an increasingly diverse suite of metal perpetual contracts:
- Gold: A cornerstone for traders seeking stable, highly liquid precious metal exposure.
- Silver: One of the most actively traded industrial and precious metal instruments on the platform.
- Copper: Provides exposure to industrial metals and macroeconomic trends.
- Palladium: Enables targeted trading for high-demand automotive and tech applications.
- Platinum: Grants access to another critical precious metal market with strong industrial utility.
Ostium’s approach enables these RWA markets to exist entirely on-chain—granting users decentralized liquidity, transparent pricing, and permissionless access. By bridging traditional financial commodities with DeFi, Ostium is creating an entirely new paradigm for speculation, hedging, and gaining exposure to physical assets—all without intermediaries.
DeFi Opportunities for Tokenized Gold
One of the most compelling aspects of tokenized gold lies in its programmability within decentralized finance. Unlike traditional gold sitting idle in vaults, on-chain gold can generate yield and serve as collateral.
Liquidity Provision on Decentralized Exchanges (DEXs)
Tokenized gold assets such as PAXG (Pax Gold) and XAUt (Tether Gold) trade actively on decentralized exchanges including Uniswap v2 and v3, Curve, Fluid, and Balancer. On these platforms, liquidity providers (LPs) earn trading fees by supplying capital to pools such as PAXG/USDC or PAXG/WETH.
- Risks: Impermanent loss if price moves outside the selected range; Ethereum gas fees may materially impact profitability.
- Yield Potential: Rewards stem from trading fees proportional to pool volume—potentially modest or volatile depending on trading activity.
At time of writing, the 30-day average annual percentage yield (APY) for the most actively traded tokenized gold pool on Uniswap ranged between 10% and 25%, reflecting strong trading activity and concentrated liquidity positions.
Lending Protocols
XAUt is supported as isolated collateral on Aave, allowing users to borrow funds without exposing other assets to risk.
Falcon Finance XAUt Vault
Some protocols—including Falcon Finance—have launched staking products tailored for tokenized gold (e.g., XAUt vaults). By locking tokenized gold for a fixed term, investors receive yield in the form of synthetic stable assets (e.g., USDf).
- Mechanics: Users lock XAUt in a vault and receive periodic yield payments in synthetic or diversified assets, per protocol design.
- Yield Expectations: Reported target annual percentage rates (APRs) for this vault strategy hover around 3–5%, though actual incentives and risk profiles vary by protocol and market conditions.
- Risk Considerations: Smart contract risk and protocol-specific tokenomics are critical factors.
Real-World Asset (RWA) Market Context
The Broader RWA Wave
Tokenized metals exist within the rapidly expanding RWA tokenization landscape. As of January 2026:
- RWA TVL: Over $21 billion (a substantial increase from ~$17 billion at end-2025).
- Including Stablecoins: Total tokenized real-world value exceeds $317 billion.
- RWA Holders: Nearly 600,000 direct holders of tokenized assets—tripling since 2024.
- Industry Forecast: Per McKinsey, the sector could reach $2 trillion by 2030.
Tokenized Commodities Segment
Within the RWA domain, tokenized commodities’ market capitalization grew to approximately $4.48 billion by early 2026:
Core Advantages of Tokenized Metals
- Accessibility: Fractional ownership allows investors to buy gold for as little as $1; 24/7 global trading eliminates market hours restrictions; storage concerns are eliminated, as custodians manage physical security.
- Liquidity: Near-instant settlement replaces traditional T+2 settlement. Deep liquidity on major platforms supports large trades with minimal slippage; cross-chain transfer capability enables seamless movement across networks.
- Transparency: On-chain verifiable ownership creates immutable transaction records. Regular third-party audits verify physical backing, while on-chain proof-of-reserves (PoR) allows anyone to validate alignment between supply and reserves.
- Utility: Can serve as collateral in DeFi lending protocols (“borrow without selling”); generates passive yield via staking or liquidity mining.
Notable Risks
Custodial and Counterparty Risk Reliance on centralized custodians for physical storage introduces single points of failure. Financial distress of the issuing entity raises solvency concerns. Dependence on audit integrity requires investors to trust third-party auditors. Additionally, redemption limitations—including minimum thresholds and geographic restrictions—may hinder immediate physical access.
Technical Risk Smart contract vulnerabilities have led to billions of dollars in losses across DeFi. Blockchain congestion or outages may prevent trade execution. Oracle manipulation or failure may result in incorrect pricing. Moreover, cross-chain bridge vulnerabilities pose a significant attack vector for multi-chain tokens.
Market Risk Underlying metal price volatility directly impacts token value. Liquidity constraints during market stress may impede investor exits. Under extreme conditions, tokens may de-peg from spot prices. For perpetual contracts, leveraged liquidations may lead to total asset loss.
Regulatory Uncertainty Evolving legal classifications of tokenized commodities present compliance challenges. Divergent jurisdictional requirements affect global accessibility. Enforced anti-money laundering/know-your-customer (AML/KYC) rules may impose additional burdens. Potential restrictions on DeFi integration could undermine asset utility.
Future Outlook
Market Projections
With continued maturation of on-chain infrastructure, growing institutional participation, and deeper integration of real-world assets, the tokenized metals—and broader RWA tokenization—market is poised for sustained expansion. Recent data indicates tokenized commodities are on an upward trajectory, led by gold and supported by increasing attention toward other metals.
Estimates from early 2024 reflect a nascent tokenized market, where standardized reporting was still under development.
Conclusion
Tokenized metals represent one of the most compelling intersections between traditional finance and blockchain innovation. With tokenized gold alone surpassing $5 billion, this is no longer an experiment—it is a fully operational market delivering tangible advantages over conventional precious metals investing.
For investors, the appeal is self-evident: own gold or silver with a single click, trade 24/7 without time restrictions, use holdings as DeFi collateral, and eliminate physical storage concerns. For traders, perpetual contracts deliver leveraged exposure to metals—without expiry dates or physical delivery obligations.
Yet this market is not without risks. Dependence on custodians, smart contract vulnerabilities, regulatory uncertainty, and liquidity constraints during stress periods all warrant careful consideration. Due diligence on issuers, audit reports, and redemption mechanisms remains essential.
As we enter 2026, infrastructure continues maturing. Hyperliquid’s dominant DEX platform, Ondo’s expansion onto Solana, and the broader RWA wave all point toward a future where boundaries between traditional and digital commodity markets blur.
The $32-trillion gold market is going on-chain. Whether you’re a long-term holder seeking safe-haven exposure—or a trader aiming to profit from volatility—tokenized metals provide tools that simply didn’t exist just a few years ago. The future of commodities is being written on the blockchain—and it’s happening now.
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