Opinion by: Kevin Rusher, founder of Raac
This is a world of change there. This year, we saw stocks riding on the wild ride as the gold was pumped and the crypto was caught somewhere in the middle. Investors threw risks and scrambled for safe shelters. Gold led the charge.
While gold is safe, it is not very hardworking. Unlike cash and wealth, yellow metal does not generate income. Today, more than ever, investors need to earn an produce in gold – especially in the decentralized financial sector (DEFI).
The only way to make money from gold is to buy low and sell high. Most investors are not likely to buy gold like this. That’s for good reason – in the long run, the performance of gold is usually the same, if not without some peaks and troughs here and there, as we have seen recently.
For example, after the financial crisis in 2008, the price of gold went up 148% but stagnated for almost a decade before the Covid-19 pandemya triggered another rally, and we would probably see a golden hold, if not fall from the new record high once the markets survive. While it remains a great fence, the long -term track record of Gold is not a growth story.
Investors prefer treasurys or high yield saving accounts as part of a balanced portfolio. While gold can miss these possessions at uncertain times, it offers a better balance of security and predicted income in the long run.
The defi solution
Here Defi brings a change to the oldest owner in the world. The DeFI can be significant in the investment of gold, offering the speed and transparency of blockchain-based transactions and the profitability of returns.
Currently, however, most of the tokenized gold is the same as handling it with a funds exchanged by the exchange (ETF). Stablecoins giant such as Tether and Paxos have launched gold-supported tokens, which they say are fully supported by physically, audited gold reserves, but do not offer yield.
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Most investors prefer liquid, tradable assets such as cryptocurrencies and stablecoins, which can produce attractive returns. Many would prefer, for example, to buy Tether’s USDT (USDT) Stablecoin and promote it, earn rewards while still maintaining the owner.
Perhaps this is why the market capitalization of the gold -supported tokens remains modest. Tether Gold, the world’s most vicious token in the world, has a market capitalization of just under $ 835 million, for example, while the Paxos Gold is sitting around $ 799 million. Combined, this is equivalent to only 1% of the USDT market cap.
Unlocking income from the oldest owner in the world
To unlock the full potential of gold, we need to make tokenization one step further by creating a defi ecosystem in which the tokenized gold will be actively used-lending, loans and integrated with yield-carrying techniques.
One possibility is that for companies like gold miners is to issue tokenized versions of their reserves that can be stablecoins that can be stacked to earn a yield. The deprivation of protocols whose liquidity mechanisms allow trading of tokens of Stablecoins and real-world assets (RWA), holders can take advantage of additional yield opportunities throughout the Defi Ecosystem.
Beyond the benefits of yield opportunities, blockchain technology means that tokenized gold investors can benefit from the flexibility of 24-hour trading, close to discovering real-time prices and close instant settlement without compromising the stability of the property.
The future of gold investment
It is, perhaps, ironic that – just like governments around the world are beginning to put their seal of approved in digital finance – gold becomes a desirable commodity again. The public’s interest here will grow because governments are essentially ratify digital finance. At the same time, the appetite for gold in uncertain times will also increase.
Defi can include these trends and kicks a natural evolution to the gold -owned evolution that provides a solid bridge between traditional and digital finances. While gold within the traditional market attracts investors seeking stability, the DeFI brings opportunities to not compromise that stability, as it presents new and unique harvest opportunities.
Gold has captured humanity for thousands of years. This is the foundation of myths, the standard of wealth and the ultimate fence against uncertainty. But in the financial world today, it requires upgrading.
By incorporating gold into the Defi Ecosystem, we can unlock its true potential-not just as a store of value but as an income posed. The oldest safe possession of haven in the world is finally on the brink of a digital evolution.
Opinion by: Kevin Rusher, founder of RAAC.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
