Blockchain and gold: who are the market leaders and how a newcomer is raising the bar higher than ever
Blockchain and gold is a duo that is certainly not a newcomer to the cryptocurrency market. Since the boom of ICOs and STOs that started in 2016, there have been hundreds of projects attempting to explore the synergy effects between the novel technology and the precious metal. Only a handful of them, however, proved to be sustainable concepts that can offer a real use case and returns for investors.
Lately, gold has been making headlines again due to the asset’s great financial performance amidst a turmoil in the stock, cryptocurrency markets and the world economy. Investor’s interest in gold investments is rising and the cryptocurrency market still has much to offer to the gold sector.
In this article, we will explore some of the leading projects in the gold space — most notably gold-backed stablecoins — as well as a newcomer that is expected to open new possibilities for gold investing.
Pax Gold (PAXG)
Paxos Gold (PAXG) is aimed at providing an easier way for investors to participate in gold financial products. The token is backed by one fine troy ounce of gold at a ratio of 1:1 and is regulated by the New York State Department of Financial Services. It also offers instant settlement and can be redeemed to physical gold. These features overall make it one of the most trustworthy gold-backed cryptos on the market today.
Tether Gold (XAUT)
Tether (USDT) is the most famous stablecoin today that is responsible for the majority of transactions to some of the leading cryptos like Bitcoin back and forth. Many cryptocurrency investors are storing their cryptos in USDT because of the large market cap of the stablecoin. Tether Gold (XAUT) is a cryptocurrency by the same developer, Tether Limited, that is represented by gold bars stored in secured vaults in different locations. XAUT can be used by holders to benefit from DeFi protocols and thus offers the possibility for some passive income. XAUT tokens represent undivided ownership rights of one ounce of gold, which currently stands at $1920 USD at the time of writing, making it fairly expensive for some investors.
The Perth Mint Gold (PMGT)
The Perth Mint Gold token is fully backed by gold certificates that represent physical gold in the same ratio. The gold certificates can be verified at any time by the holders, allowing for a high degree of transparency related to the gold reserves. According to the issuer, the gold is guaranteed by the Government of Western Australia. Token holders can redeem PMGT tokens for various products such as LBMA-accredited gold bars.
Easygold Token (EASG)
Easygold Token is a security token that uses 100% of the funds collected to invest in the acquisition of raw gold and turning it into high value gold bars. The token is one of the first to offer profit share rights to its holders in the likes of dividends that are paid out once per year.
One of the core differences between Easygold Token and the rest of the leading cryptocurrencies that are exploring the synergy effects between blockchain and gold is the fact that Easygold Token is not a stablecoin that maintains gold reserves. The project instead relies on a business model based on a simple but effective chain of activities.
With the funds raised through the crowdsale, Easygold Token acquires raw gold directly from one of the suppliers of the company, which is then processed into high quality LBMA-certified gold bars that are sold with a profit of 20% to 30% on the commodity markets. The project then reinvests again the revenue in the same cycle, which allows it to increase the amount of raw gold both by investing more and getting a higher discount on the buy price due to the improved economies of scale and, consecutively, the overall profit made.
Because the EASG token grows over time thanks to the continuous returns of the business model of the company, it offers an additional mechanism to reward token holders through dividends that can be as high as 50% of the net profit derived from the operational model of the project.
The risk for investors is mitigated to a great extent due to two key reasons: first, the EASG token is a regulated security token and as such, is a subject of a much stricter regulation by financial authorities when compared to utility tokens and even stablecoins. Many stablecoins in fact do not disclose their gold reserves publicly, essentially translating in uncertainty for investors when the question arises how stable is the token in reality. The second reason is the funds distribution — 100% of the funding acquired via the Security Token Offering is invested in the acquisition of raw gold and the operational process of Easygold Token. This means that even in the unlikely case of bankruptcy, the token is represented by gold as an asset that can be liquidated if needed.
The company behind the project, Hartmann & Benz, has been active on the precious metals market in Europe since 2019 and has acquired a customer base of thousands of gold investors. It received numerous certifications of quality, as well as media features from reputable medias like Bloomberg and Wallstreet Online.
If you are interested in learning more about the benefits for investors, who the people behind the project are and how the business model exactly works, visit www.easygold.io.
