Chapter 5 · RWA Types: Tokenized Gold and Commodities

The previous articles studied the basic concepts of real-world assets (RWA), as well as the tokenization of Treasuries and government debt, and of stocks.

This time we continue with another direction: tokenized gold and commodities.

Commodities such as gold, silver, crude oil, and copper all have mature trading systems in traditional financial markets. As they enter Web3, these assets are also being brought onto blockchains.

If you buy a gold token, do you really own the corresponding physical gold? And beyond gold, which other commodities have already gone onchain?

This article starts with gold and looks at how commodity RWA works.

1. What is commodity tokenization?

Commodities are basic goods with economic value that can be traded in bulk. They fall into four main categories:

• Precious metals: gold, silver, platinum.

• Energy: crude oil, natural gas, coal.

• Industrial metals: copper, aluminum, nickel.

• Agricultural products: wheat, corn, soybeans, coffee.

Commodity tokenization means using blockchain tokens to represent ownership of physical commodities, related interests, or financial rights linked to commodity prices.

For example, an institution buys physical gold, has it kept in a vault, and then issues corresponding onchain tokens. By holding the tokens, users receive the corresponding gold interests according to the product rules.

But note that a commodity token does not necessarily represent ownership of physical goods. Some are backed by physical reserves, some correspond to warehouse receipts or other interests, and some are simply financial products that track commodity prices.

To judge whether a project has truly achieved physical commodity tokenization, you need to look at the underlying assets, the legal rights, and the redemption mechanism.

2. How does physical gold get onchain?

Taking gold tokens as an example, the whole process can be understood in four simple steps:

1. Buying the gold: the issuer purchases physical gold bars that meet the relevant standards.

2. Custody and verification: the gold enters a professional vault, where details such as weight and purity are recorded.

3. Issuing tokens: the issuer releases the corresponding amount of onchain tokens according to the product rules.

4. Trading and redemption: users can trade on supported platforms and, if the conditions are met, apply to redeem.

Suppose each token corresponds to one troy ounce of gold. If the issuer holds 1,000 troy ounces of qualifying gold, it can issue the corresponding number of tokens as long as the issuance rules are satisfied.

Tokens can be transferred onchain without physical bars having to be moved for every transaction.

But a blockchain can only record what happens onchain; on its own it cannot prove that the vault really contains enough gold. Proof of reserves, custody arrangements, and legal documents are just as important.

3. Which gold tokens are worth watching today?

1. PAX Gold (PAXG)

PAXG is issued by Paxos Trust Company and is a representative example of a token backed by physical gold.

According to the official materials, each PAXG corresponds to one troy ounce of gold meeting the relevant standards; holders can look up the details of the bars, and when the conditions are met they can apply to redeem.

Official: Pax Gold

2. Tether Gold (XAU₮)

Beyond USDT, Tether has also launched the gold token XAU₮.

According to the official terms, each XAU₮ corresponds to interests in one troy ounce of gold, with the underlying gold stored in vaults in Switzerland.

Its difference from USDT is this: USDT is mainly used for dollar-denominated pricing and payment settlement, while XAU₮ gives users investment exposure related to gold.

Official: Tether Gold

3. Matrixdock Gold (XAUm)

XAUm is a gold token launched by Matrixdock, part of BIT Group.

According to the official materials, each token corresponds to one troy ounce of physical gold meeting the relevant standards. The project also provides asset verification and a physical redemption mechanism.

In 2026, Matrixdock further expanded XAUm's onchain applications, exploring combinations with stablecoin settlement and decentralized trading platforms.

Official: Matrixdock Gold

4. Kinesis Gold (KAU) and Silver (KAG)

Kinesis offers both gold and silver tokens:

• KAU: each token corresponds to 1 gram of gold.

• KAG: each token corresponds to 1 troy ounce of silver.

According to the official materials, the precious metals are kept in vaults, and holders can trade or apply to redeem according to the rules.

Kinesis also designed a holder yield mechanism tied to the platform's trading fee income. Note that this yield comes from the platform's income arrangements; gold and silver themselves do not generate interest.

Official: Kinesis Gold

4. Beyond gold, have other commodities gone onchain?

The answer is yes, but different projects are at different stages of development and use different forms of asset backing.

1. Crude oil: WTIC

Energy Substantiation (EnSub) launched WTIC, aiming to connect West Texas Intermediate (WTI) crude oil with onchain tokens.

Project materials state that WTIC uses a physical inventory-backed design.

However, crude oil involves storage tanks, quality, transportation, and delivery. Even if a token is backed by crude oil inventories, that does not mean holders can withdraw a barrel of oil at any time.

2. Agricultural products: Agrotoken and Cropto

Agrotoken focuses on digitizing agricultural commodities such as soybeans, corn, and wheat, trying to connect grain held in storage with onchain tokens for use in payments, financing, and other scenarios.

Cropto has also launched tokens related to agricultural products such as wheat and corn, and has published its trading channels.

Compared with gold, agricultural products also involve quality grading, storage losses, shelf life, and transportation, so inventory verification is a critical part of such projects.

Projects: Agrotoken | Cropto

3. Copper: Toto Finance

Toto Finance is developing Copper Now (CuTT), planning to connect standard copper cathodes held in storage with onchain tokens.

However, according to previously published project materials, CuTT is still in development and should not be treated as a mature product that has officially launched.

This case shows that industrial metals are also exploring tokenization, but there is still a lot of work to be done between issuing a token and building a reliable system of reserve verification and physical delivery.

5. How do commodity tokens differ from ETFs and futures?

Taking gold as an example, the three kinds of products are all related to the gold price, but they represent different rights.

In addition, some tokens merely track the gold price through derivatives, with no corresponding physical gold reserves.

So you cannot assume a token is backed by physical gold just because its price follows gold.

6. What value does commodity tokenization offer, and what are its risks?

The value of commodity tokenization lies mainly in making traditional commodities easier to bring into digital trading and the onchain financial system.

For example, tokens can be split into smaller units and transferred more conveniently; where relevant protocols support them, they may also be used for trading or collateralized lending.

But tokenization does not eliminate the risks of the commodities themselves, and it may introduce new problems:

• Price risk: the prices of gold, silver, crude oil, and other commodities all fluctuate.

• Custody risk: does the issuer actually hold enough physical assets?

• Issuer risk: if the institution runs into trouble, can holders get their assets back?

• Redemption and liquidity risk: can you redeem, is there a minimum amount, and are there enough buyers in the market?

• Technology risk: smart contract vulnerabilities, lost private keys, or cross-chain failures can all cause losses.

For crude oil, copper, and agricultural products in particular, beyond the token itself you also need to factor in warehousing, quality inspection, logistics, and physical delivery.

7. My conclusion

Having studied tokenized gold and commodities, I believe what deserves the most attention is not how many commodities have issued tokens, but whether onchain tokens can establish a credible, verifiable, and enforceable connection with real-world assets.

Gold is relatively easy to standardize and store, which is why physical gold tokens such as PAXG, XAU₮, and XAUm have already emerged.

Agriculture, energy, and industrial metals are also exploring going onchain, but they face more complex storage, verification, and delivery challenges.

A blockchain can record the issuance and transfer of tokens, but onchain data alone cannot prove how much gold, crude oil, or copper actually exists in the real world.

So when researching commodity RWA, beyond project scale and trading volume, what matters more is getting clear answers to three questions: where are the assets, who do the rights belong to, and how do you redeem?

This article remains my personal study notes. If anything is understood incorrectly, corrections from readers are welcome.

This article is for learning and research discussion only and does not constitute investment advice.