Tokenized gold on the Q blockchain
As of today, VNX Gold — a token backed with physical gold — is live on the Q blockchain.
In this post, I provide a short background on VNX Gold and the reasons why VNX has chosen Q as a platform for tokenization.
VNX Gold
VNX Gold (VNXAU) allows users to purchase and sell the purest gold from anywhere on the globe. Each token reflects an ownership of 1 g of gold, which is kept in highly secure European vaults in strict accordance with all legal requirements.
While users’ physical bars can be personally picked from the vault and delivered to any location in the world upon request, tokens can be traded on the site or via a cryptocurrency exchange. In this way, VNXAU tokens combine the stability of gold with the flexibility of a crypto asset.
VNXAU is issued by VNX Commodities AG, a company based in the Principality of Liechtenstein and registered with the Liechtenstein regulator FMA.
Why VNX has chosen Q
When looking for an alternative smart contract platform to build on, VNX’s CEO Alexander Tkachenko told me that they needed it to be fast and cheap yet secure and decentralized. Furthermore, there should not be forking risk since it needs to be clear at all times which tokens represent customers’ ownership of their gold.
Of course, these requirements are not new — who wouldn’t want a secure blockchain with low fees? However, as it turned out in our discussion, Q fulfills these requirements in ways that other blockchains don’t.
With regards to fees: Those currently stand at 0.01 cent per transaction on Q, making the platform extremely competitive. Structurally, fees are expected to remain low on Q even as network traffic grows, since Q’s economic model does not depend on transaction fees for validator rewards.
In terms of decentralization and security, Q’s concept of a two-layer node system that enforces clear governance rules make the blockchain robust against any types of attacks. A malicious actor would need to compromise not only validator nodes but also root nodes — all at the same time. Such an attack would not only be more costly but also much more complex than a simple 51% attack on comparable conventional proof-of-stake blockchains.
Lastly, since the identity of the “real” Q chain is defined by its constitution, forking risk is practically eliminated. This is an important factor for issuers of tokenized assets, who cannot tolerate any uncertainty about which tokens represent a valid claim on the underlying assets.
These factors make Q an ideal platform for issuers of tokenized real assets. On top of that, issuers can choose to expand the functionality of their tokens by using Q’s governance infrastructure — for example its dispute resolution procedure. This provides additional optionality that can add significant value in the future.
What’s next for VNX Gold
Today you can already purchase VNX Gold on LBank exchange. Withdrawals to the Q network will be enabled soon, allowing you to use VNX Gold within the Q network. More purchase and trading options will follow soon — you can learn about these by following VNX, the issuer of VNX Gold, on their Twitter and Discord.
I am also aware of teams that are working on adding more functionality to VNX Gold — if you stay tuned via Q’s Twitter or join Q’s Discord channel, you will be among the first to know!
