As more investors want on-chain financial products that are easier to use, tokenised commodities are becoming more popular. This follows fresh all-time highs for gold and silver.
Tokenised commodities on the blockchain are getting closer to the $4 billion mark, thanks to new all-time highs for the world’s most valuable metals.
According to TradingView statistics, gold, silver, and platinum all reached all-time highs on Friday. Spot gold rose to $4,530 per ounce. Silver momentarily hit an all-time high of $74.56 per ounce, despite not being a big player in the tokenised commodities market right now.
According to the RWA.xyz data aggregate, tokenised commodities went up by 11% in the month leading up to Friday, hitting $3.93 billion. The most tokenised commodity was Tether Gold XAUT at $4,525.54, which was valued $1.74 billion. The second biggest was Paxos Gold PAXG$4,539.20, which was worth $1.61 billion.
Precious metals drive growth in on-chain commodity markets
You can transfer and trade tokenised precious metals on the blockchain outside of regular trading hours, but pricing, liquidity, and redemption are still tied to the old system.
Tokenised commodities are a part of the larger real-world assets (RWA) industry. This sector issues blockchain-based versions of traditional assets to speed up settlement and allow for fractional ownership.
Standard Chartered, an investment bank, predicts that the value of tokenised RWAs (not including stablecoins) will rise to $2 trillion by 2028. They also expect that $250 billion will go into “less liquid” investments like private equity and commodities.
Ethereum dominates RWA tokenisation but usage remains concentrated
According to RWA.xyz, it has a 65% market share in tokenised RWAs, worth $12.7 billion. BNB Chain is in second place with 10.5%, or $1.85 billion.
More tokenisation can lead to more activity on the blockchain and higher transaction costs on Ethereum.
Blockchain statistics, on the other hand, suggests that tokenising traditional financial assets is still a small part of onchain activity compared to more proven use cases like stablecoins and fungible token trading.
According to data from the crypto intelligence platform Nansen, Ethereum was the fourth most expensive cryptocurrency to use in the past 30 days, with $11.41 million in fees.
The Tron network, where stablecoin activity is most common, came in #1 with $29.5 million in fees. BNB Chain and Solana came in second and third, in that order. People like to use these two blockchains to launch tokens and trade them in stores.