While gold prices have been volatile due to the ongoing war between the US and Israel and Iran, tokenization platform Theo on Tuesday hinted that experimentation with the precious metal continues at a rapid pace.
According to a press release, the company has raised $100 million to offer thUSD, a “gold-powered stablecoin.” Most stablecoins are backed by cash and US Treasuries, but Teo said the US dollar would not be among them.
Instead, thUSD will seek parity with the US dollar based on reserves in thGOLD, a token introduced by Theo in January. The token, which also generates yield, is backed by collateral financing agreements between Theo and gold retailers such as Singapore’s Mustafa Gold.
As a result, Theo said thUSD will generate yield from two independent sources. When the USD is minted, Teo suggested betting on a decline in the precious metal to reduce exposure, while simultaneously shorting gold features through venues like CME.
By holding a long position through thGOLD while shorting gold futures, Theo aims to capture the spread between the asset’s spot price and the futures price, known as a cash-and-carry trade. when theo announced In a $20 million funding round last year, the company said it would use the money to bring Wall Street-level trading strategies to retail investors.
Iggy Ioppe, Theo Chief Investment Officer, said: decryption The company also plans to short sell gold functions in crypto-native ventures such as Binance and decentralized exchanges. superfluidity. He estimated that the arrangement could yield an annualized yield of 10% under favorable conditions.
While companies like Theo are experimenting with assets such as oil and petroleum; real estateIoppe said the New York-based company remains focused on strong players. The company’s core product, thBIll, debuted last July as a tokenized money market fund.
“We are currently in a crypto bear market,” Ioppe said. “We start with risk-off assets, whether it’s Treasury bills or gold. These are things you invest in when you’re not in a bullish mood, so there’s a huge demand on-chain right now.”
Oppe pointed out that gold retailers like Mustafa benefit from thGOLD because the token allows them to continue manufacturing goods without being fully exposed to the gold price.
“For them, it’s a risk hedge,” he says. “They can stick to the business of making and selling jewelry, which makes their business more predictable.”
Since the beginning of this month, gold prices have retreated from a record high of $5,300 an ounce. However, it is still up about 67% over the past year. Yahoo Finance.
So far, the market for tokenized gold has been dominated by stablecoin issuers Tether and Paxos. As of Monday, Tether Gold and Pax Gold were worth about $2.75 billion and $2.5 billion, respectively. CoinGecko.
within the context of decentralized finance, or DeFithe thUSD token is set to be compatible with lending protocols like Morpho that support digital representations of real-world assets. Still, investors in Theo’s products must register by providing personal information to the whitelist.
“It’s accessible from 200 countries,” he said. “Once the token is on-chain, it becomes permissionless in DeFi. That’s our whole North Star.”
