Gold Remains King of Tokenized Commodities Even as Oil, Metals Gain Traction

The market for tokenized commodities is up nearly 2% over the past 30 days, though still below its $5.6bn peak in March, according to RWAxyz, a tokenization research website. Represented value – a measure of underlying exposure – has jumped more than 45% over the same period to $2.89bn.

Gold-backed tokens from Tether (XAUT) and Paxos (PAXG) account for more than 90% of the sector with market caps of about $2.7bn and $2.3bn, respectively. The remaining tokenized commodities total just over $290mn across more than 60 assets.

Other assets are on the rise

The data suggests tokenized commodities are still mostly a gold trade, not a broad asset class, even as early signs of expansion have begun to appear.

Recent research by data platform Token Terminal shows that newer products tied to silver, oil, and copper remain small but are starting to gain traction. Tokens such as Ondo Finances’ SLVon, USOon, and COPXon – which track silver, oil, and copper-linked assets – all launched within the past year and have seen early growth, with SLVon up about 48% year-to-date (YTD).

However, despite their smaller size, these assets are beginning to reflect macro trends. Silver and copper have rallied alongside gold, while oil has moved in response to geopolitical tensions, including the Strait of Hormuz crisis following U.S.-Israeli strikes on Iran in late February. As of 27 Apr, spot gold traded at $4,695 per ounce, down 0.6% on the day, while silver changed hands near $76.16, slipping about 0.3%.

There is also significant room for growth, Token Terminal noted. For example, if SLVon captured just 1% of the $35.7bn held in the iShares Silver Trust, it would reach about $357mn, which is more than 10 times the combined size of SLVon, USOon, and COPXon today. The iShares Silver Trust (SLV) is the largest exchange-traded commodity fund designed to track the spot price of silver. 

Using the same model, COPXon would grow to about $67mn and USOon to around $26mn, Token Terminal revealed.

Tokenized commodities vs RWA market

Still, tokenized commodities remain a smaller part of the broader real-world asset (RWA) market, where most growth is coming from institutional products like credit and US treasuries. More specifically, tokenized commodities make up about 17% of the roughly $30bn real-world RWA market, which is up 9.3% over the past month, per RWAxyz.

The majority of that growth is being driven by tokenized US Treasuries, which account for about $15bn (up 18% over the past month) or roughly half the RWA market. 

This divide is also showing up in how the assets are used. Institutional RWAs are often held in new wallets created for those investments, while tokenized commodities are more commonly used by existing crypto users, according to a recent report by Chainalysis. 

This suggests that, at least for now, the tokenized commodity sector’s growth may depend more on crypto user demand than institutional inflows.