Tokenized gold is the second largest onchain real world asset category, trailing only tokenized U.S. Treasuries. Institutional investors, asset managers, and retail users are increasingly allocating capital to gold onchain not just as a store of value, but also as productive collateral to borrow liquidity.
Today, the tokenized gold market is dominated by two issuers: Tether Gold (XAUT) and Paxos Gold (PAXG).
Gold Loan Interest Rate
Gold backed loans onchain typically use variable interest rates, which fluctuate based on supply and demand across lending protocols. Rates and loan-to-value (LTV) ratios vary by platform and market conditions, but most gold-backed loans currently offer 70–75% LTV.
XAUT by Tether
XAUT is the largest tokenized gold asset by market capitalization. It is widely integrated across DeFi lending platforms and offers some of the broadest cross-chain support.
XAUT can currently be used as collateral on the following platforms:
- Aave: Ethereum, Plasma
- Morpho: Ethereum, Arbitrum, Monad
- Fluid: Ethereum, Plasma
Across these platforms, XAUT backed loans generally support LTV ratios between 70% and 75%, depending on protocol specific risk parameters.
PAXG By Paxos
PAXG is the second largest tokenized gold asset by market capitalization and is often preferred by U.S. based institutional investors. Paxos operates under New York Department of Financial Services (NYDFS) oversight, provides monthly independent audits, and offers clear legal claims to fully allocated gold bars.
PAXG is currently supported as collateral on:
- Morpho: Ethereum
- Fluid: Ethereum
Like XAUT, PAXG backed loans typically offer 70–75% LTV, subject to platform conditions.
Assets Available to Borrow Against Tokenized Gold
Morpho and Fluid: Borrowing is limited to USD stablecoins.
Aave: Borrowers can access a broader range of assets, including:
- USD stablecoins
- EUR stablecoins
- Bitcoin
- Ethereum
- Other supported crypto assets
Choosing the Right Gold Lending Strategy
Where you deposit tokenized gold and what you borrow against it ultimately depends on your gold strategy. Investors seeking simple USD liquidity may favor a lending platform based on it’s current borrowing interest rate, while those looking for multi-asset exposure may prefer Aave’s broader borrowing options.
Investors seeking yield on their tokenized gold while borrowing USD stablecoins may favor Fluid. Fluid offers a differentiated approach through its smart collateral feature, which allows users to supply XAUT–PAXG liquidity as collateral, earn trading fees, and simultaneously borrow USD stablecoins.
As tokenized gold adoption grows, onchain gold lending is becoming a core primitive for both capital efficiency and balance sheet management in DeFi.