Tokenized commodities look beyond gold as lending and oil open new markets
In this news:
Key takeaways
- Tokenized silver products are emerging to pass institutional lease income to holders.
- Industry leaders forecast the tokenized commodities market to exceed $100 billion within a decade.
- EnSub expanded its WTI crude oil token from Ethereum to Solana on Oct. 2.
“The big proposition is access,” co-founder Bhau Kotecha told CoinDesk in an interview. Gold lending has historically required scale and relationships unavailable to many investors, he said.
Kotecha sees demand from individuals, family offices and institutions, with borrowing against PAXGy a possible next step. Lending returns are not guaranteed, and borrower defaults could erode the token’s value.
Silver financing markets
Silver offers another route into that financing market. Theo’s thSLVR product passes income from institutional silver leases to holders while maintaining exposure to the metal’s price.
Theo Chief Investment Officer Iggy Ioppe sees growth coming from existing commodity owners and users: institutions seeking productive collateral, refiners financing inventory and corporate treasuries seeking assets that settle quickly.
Silver is “the natural second” after gold, he said, citing industrial demand and an established leasing market, although greater volatility and a tighter supply of available metal complicate the opportunity.
Ioppe forecasts a tokenized commodities market worth tens of billions within five years and more than $100 billion within a decade. Within 15 years, he expects tokenization to become part of ordinary commodity settlement and financing.
The oil test
Oil presents a larger logistical challenge, and, in EnSub’s view, a substantial opportunity.
The company expanded its WTIC token from Ethereum to Solana on Oct. 2. Each token represents one barrel of West Texas Intermediate (WTI) crude backed by verified physical inventory, according to its announcement.
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