How blockchain helps to bring gold to digital markets — Interview with DAO.Link

Asset tokenization has shed new light on blockchain technology by linking traditional finance markets with decentralized finance (DeFi). By enabling the digitalization and tokenization of widely accepted assets such as real estate and precious metals, real-world asset (RWA) protocols have become one of the biggest trends in crypto, experiencing a remarkable surge in total value.

Asset tokenization is expected to become a huge market by 2030. Source: Boston Consulting Group

In this interview, Julien Aerni, CEO of DAO.Link, a Swiss-based entity whose goal is to promote decentralization by participating in the launch of DAOs, explains the dynamics of RWA tokenization and explains how DAO.Link’s latest initiative, Gold DAO, aims to create a decentralized version of gold.

Cointelegraph: How do RWAs like gold compare to crypto assets, like Bitcoin or stablecoins, in terms of investor interest and market dynamics?

Julien Aerni: In today’s digital transformation, connecting the tangible with the digital is crucial. Historically used as a currency and a safe haven, blockchain now brings gold into the digital world, free from physical constraints. RWA tokenization offers stability, attracting investors seeking safe, inflation-resistant assets. In contrast, cryptocurrencies like Bitcoin (BTC) appeal to those looking for high-risk, high-reward investments, while stablecoins offer a lower-risk crypto exposure.

CT: Could you please introduce your latest initiative, Gold DAO? What inspired you to launch this project, and how does it align with DAO Link’s broader vision?

JA: The project was inspired by the growing need to bridge the physical and digital worlds in a fully decentralized manner, which aligns closely with DAO Link’s vision of launchpadding real-world entities into a decentralized autonomous organization (DAO) on the blockchain. By tokenizing gold, Gold DAO aims to solve traditional challenges associated with gold investment, such as storage and transportability.

Gold DAO’s mission reflects the trend toward a more digital world, where tangible assets like gold gain enhanced relevance and utility through blockchain technology.

CT: What are the different steps of the Gold DAO?

JA: The Gold DAO operates through three distinct phases, each playing a crucial role in its ecosystem. The initial phase, which has been completed, focused on the tokenization of physical gold into digital assets called Gold NFTs, which represent ownership of physical gold.

The second phase focuses on the development, utilization and integration of GLDT tokens, which are fungible and represent digitized gold. The final phase involves developing a gold-backed stablecoin to provide a stable and reliable digital currency option backed by the tangible value of gold.

Each phase of Gold DAO is designed to progressively enhance the accessibility, utility, and integration of gold within the digital and decentralized finance landscapes.

CT: How does your platform navigate the legal and regulatory landscape, especially concerning asset tokenization and DAO operations?

JA: Gold DAO operates independently outside the traditional regulatory framework, much like Bitcoin. This setup allows Gold DAO to function in a crypto-to-crypto realm without the governance of a corporate entity or centralized leadership. While Gold DAO itself doesn’t adhere to traditional regulations, individuals or entities engaging with it must comply with existing legal standards, including Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.

CT: Can you walk us through how physical gold is tokenized on your platform with the key technological and logistical steps involved?

JA: The tokenization of physical gold on our platform is facilitated by the ORIGYN protocol, an RWA certifier. First, we collect all the biometric data of the physical gold, including technical details, images and serial numbers. This data is then registered inside each ORIGYN NFT. The final step is third-party verification to confirm that the physical gold is securely stored.

CT: What measures are taken to ensure the authenticity and ownership of gold during the tokenization process? How did blockchain help in those?

JA: The physical gold, sourced from Metalor, one of the world leaders in the gold refining industry since 1852, is securely stored in our top-security vaults in Switzerland. The gold is transparently audited on a regular basis by KPMG and by an independent oracle. Audits are available for anybody and ensure that the gold is there, authentic and of the highest quality.

A personal audit by our owners can also be conducted on-site. An RWA certification protocol such as ORIGYN ensures that the gold is authenticated.

CT: How does Gold DAO's governance model work?

JA: Participants invest in the project in exchange for GLDGov tokens, which serve as the governance tokens for Gold DAO. These tokens allow holders to vote, propose initiatives and earn rewards based on participation. The more Gold DAO’s solutions are used, the greater the rewards for governance tokenholders, incentivizing the community to make informed and strategic decisions for the project’s future.

How Gold DAO's ecosystem works. Source: Gold DAO

CT: What would be the potential social and economic impacts of making gold more accessible through blockchain?

JA: It can lower the barriers to entry, allowing a wider range of individuals and smaller investors to participate in the gold market. Economically, this could lead to increased liquidity and a more diversified investor base. Socially, it empowers individuals globally, especially in regions with limited access to traditional banking or investment opportunities, fostering financial inclusion and offering a stable investment alternative in economies with high inflation or currency instability.

CT: Did you receive any feedback from traditional gold market stakeholders? Do you plan to collaborate with or challenge these traditional markets?

JA: We have received very positive feedback from key players in the gold industry. Industry stakeholders are enthusiastic about our approach as it enables them to tap into a new market. For instance, Metalor has traditionally sold gold to sectors like watchmaking and industry. Our collaboration with such established entities signifies the opening up of new markets and the creation of innovative solutions. This synergy demonstrates how Gold DAO not only integrates with traditional markets but also expands its reach and potential.

CT: What do you have in store for investors? Could you talk about Gold DAO’s plans for 2024?

JA: For 2024, Gold DAO is focusing on deploying a swap mechanism to transition between Gold NFTs and GLDT, a fungible token backed by gold. This development, expected shortly after Christmas, will introduce the cross-chain GLDT. Following this, we plan to launch a stablecoin pegged to the U.S. dollar and backed by gold. Additionally, we’re exploring stablecoins tied to other currencies like the euro or Swiss franc.

Exciting developments are on the horizon, including new listings on DEXs and CEXs. We’re in a dynamic environment and remain open to business opportunities and new partnerships, all with a focus on creating real value.

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