What is Tether Gold (XAUT)?
Tether Gold (XAUT) is an ERC-20 standard token. It functions as a stablecoin – a digital asset that has its value pegged to that of a tangible asset, such as fiat currencies or precious metals. In this case, the Tether Gold price is pegged to the value of gold. Specifically, one XAUT has the same value as one ounce of a London Good Delivery gold bar.
Who Founded Tether Gold?
Tether Gold was developed by Tether Limited, a company that was founded in 2014. The project is based on the concept of asset-pegged cryptocurrencies that was established by J.R. Willett in his Tether whitepaper. Here, he explored the idea of building new cryptocurrencies on top of the Bitcoin blockchain.
One of the biggest appeals for tokenized gold is the simplicity of trading. While gold is a highly valuable commodity, it’s difficult to store and trade. Gold bars are often kept in specialized vaults and require the owner to cover insurance and custody fees. It’s often sold in shares and, therefore, difficult for smaller traders to obtain.
XAUT aims to solve this issue and make gold ownership more accessible by providing digital tokens that match the tangible assets. Users are not required to purchase large quantities of gold or take full responsibility of storage themselves.
In addition to Tether Gold, the company is also known for issuing stablecoins backed by fiat currencies. The most recognizable of these is Tether (USDT), a stablecoin that is backed by the US dollar. It’s considered to be one of the biggest stablecoins in the crypto industry. In theory, the Tether Gold price for Tether trades equally as gold for the US dollar.
XAUT was officially launched in January 2020 and has been backed by gold since day one. As a stablecoin, it did not have a pre-sale or an initial coin offering. The Tether Gold coins are not issued directly by Tether Limited but rather by TG Commodities Limited, a company that handles the wholesale of metals and metal ores.
The gold bars that the network pegs its digital assets to are kept in a secured vault in Switzerland. The XAUT price is based on the standardized calculations in troy ounces. One troy ounce is equivalent to about 31 grams, or around 1.097 ounces.
Although Tether Gold was built on the TRON network, it’s also supported by other blockchain ecosystems, including Ethereum and EOS.
What Are the Uses of Tether Gold?
The XAUT price is pegged to the value of gold. The Tether Gold token does not have a maximum supply since gold has high liquidity. Gold is considered to be a low-volatility asset in traditional markets as it maintains a relatively stable value. By default, Tether Gold, as well as many other stablecoins, is not as volatile as other crypto assets, such as Bitcoin or Ethereum.
The value listed on the charts is reflective of the tangible asset. To ensure an even distribution rate, it was determined that the XAUT price for one token is equal to one ounce of gold from a London Good Delivery gold bar. Each gold bar used by AUXT is tied to a specific on-chain address.
On the market, AUXT tokens can be traded as any other cryptocurrency asset. The trade transfers the ownership of the physical gold between wallets. It’s also possible to buy enough AUXT to own a full gold bar and exchange it for the real asset. During this process, the wallet addresses are relocated to unused troy ounces in the vault.
Tether Gold offers zero custody fees. Normally, these are the fees that a customer must cover for the safe keeping of assets such as precious metals and act as insurance. Users are able to withdraw the equivalent of their purchased XAUT in Switzerland.
