Perfolio is a gold-backed lending platform. You buy gold (XAUT, where each token equals exactly 1 ounce of real physical gold stored in Swiss vaults), then borrow digital dollars (USDT, each worth exactly $1, convertible to your local currency) against your gold. No credit checks needed. No monthly EMI payments. No repayment deadlines. Your gold stays yours throughout. When you repay the loan, you get your gold back. It works like a modern digital gold pawn shop, but without the middleman, the paperwork, or the fees.

Gold (XAUT) is a digital gold token issued by Tether (the same company behind USDT stablecoins). Each gold token (XAUT) represents exactly 1 troy ounce of real physical gold, stored in LBMA-certified vaults in Switzerland. The gold reserves are independently audited every quarter by BDO Italia. Unlike gold ETFs, gold (XAUT) is redeemable for actual physical gold bars. Think of it as a digital certificate of ownership for gold in a vault: you own the gold, XAUT is your proof.

How does borrowing work?

Borrowing on Perfolio works in four simple steps. First, you buy gold (XAUT tokens) through the Perfolio app using your bank transfer or existing digital dollars (USDT). Second, you deposit your gold (XAUT) into the lending vault; think of this as locking your gold as security. Third, you receive digital dollars (USDT, worth $1 each) instantly, up to 77% of your gold's value. Fourth, you convert those digital dollars to your local currency (Indian Rupees, UAE Dirhams, Euros, etc.) and withdraw to your bank account. Your gold remains safely locked in the vault throughout. When you repay the loan, your gold is returned to you.

What interest rate will I pay?

Perfolio charges a variable interest rate starting from approximately 3% per year (APR, or Annual Percentage Rate). This means if you borrow $1,000 for a full year, you would pay about $30 in interest. The rate is not fixed; it goes up or down based on supply and demand in the lending market. You can see your current rate at any time in your Perfolio dashboard. There are no fixed monthly payments; interest accrues daily on whatever amount you have borrowed.

Are there repayment deadlines?

No. There are no repayment deadlines, no EMIs (equated monthly installments), and no fixed repayment schedule. You repay on your own terms, partially or fully, whenever you choose. You could repay after one week, one month, or one year. The only ongoing cost is interest, which accrues daily on your outstanding loan balance. Your gold collateral is returned to you as soon as the full loan amount plus accrued interest is repaid.

Where is my gold stored?

Your gold (XAUT tokens) represents physical gold bars stored in LBMA-certified (London Bullion Market Association) vaults in Switzerland. These are professional-grade precious metals storage facilities, the same standard used by central banks and institutional investors. The gold is fully insured. Tether, the issuer of XAUT, publishes independently audited reserve reports every quarter, conducted by BDO Italia, confirming that every gold token (XAUT) in circulation is backed by a real ounce of physical gold.

What fees does Perfolio charge?

Perfolio charges interest only on the amount you have borrowed, nothing else. There are no origination fees (fees for creating the loan), no account maintenance fees, no deposit fees, no withdrawal fees, and no hidden charges of any kind. You pay interest daily on your outstanding loan balance at the variable market rate, which starts from approximately 3% APR. If you borrow $1,000 for 30 days at 3% APR, you pay roughly $2.50 in total interest.

Is the lending protocol secure?

Perfolio uses an independently audited smart contract as its lending infrastructure. It is a non-custodial lending protocol deployed on Ethereum, one of the most widely used and tested blockchain networks in the world. Non-custodial means no single company (including Perfolio) can access or freeze your funds. The protocol has been independently audited by multiple leading security firms and handles billions of dollars in assets. All transactions are recorded publicly on the Ethereum blockchain, meaning you can verify every deposit, loan, and repayment yourself.

Is Perfolio a cryptocurrency app?

No. Perfolio is a gold lending platform that uses blockchain technology under the hood, similar to how Uber uses GPS technology, but you don't need to understand GPS to take a ride. You interact with gold and money, not with cryptocurrency. The blockchain ensures your transactions are transparent, secure, and instant.

What is USDT and how do I use it?

USDT (Tether USD) is a digital currency worth exactly $1. Think of it as digital dollars that you can send anywhere instantly. When you borrow on Perfolio, you receive USDT. You can then convert USDT to your local currency (Indian Rupees, UAE Dirhams, Euros, British Pounds, and more) through Perfolio's licensed payment provider and withdraw to your bank account.

What does 'digital gold' mean?

Digital gold means you own a token that represents real physical gold stored in a vault. Instead of keeping gold bars at home or in a bank locker, you hold a digital certificate (XAUT token) that proves you own that gold. The advantage: you can buy fractional amounts (as little as $10 worth), trade 24/7, and use your gold as collateral for instant loans. These are things you can't do with physical gold.

How does the lending technology work?

Perfolio's loans are powered by an audited smart contract, which is automated banking software that runs on the Ethereum blockchain. Instead of a bank officer processing your loan (which takes days and involves paperwork), the smart contract processes it in seconds with no human intervention. The protocol has been independently audited by multiple leading security firms and handles billions of dollars in loans.

What is LTV (Loan-to-Value)?

LTV stands for Loan-to-Value ratio. It's how much you can borrow relative to your gold's value. Perfolio allows up to 77% LTV. Example: if your gold is worth $10,000, you can borrow up to $7,700. The remaining $2,300 acts as a safety buffer in case gold price drops. A lower LTV means a safer position.

What happens if gold price drops while I have a loan?

If gold price drops significantly, your loan may become under-collateralized (meaning your gold is no longer worth enough to back your loan). In this case, the lending protocol may automatically sell some of your gold to repay part of the loan. This is called liquidation. Perfolio shows your 'health factor' in real-time so you can take action before this happens: either add more gold collateral or repay part of your loan.

Do I need to understand blockchain or crypto to use Perfolio?

Not at all. Perfolio is designed for people who want to use gold as a financial tool, not for crypto experts. You buy gold, you borrow money, you repay when you want. The blockchain technology works in the background to make everything faster, cheaper, and more transparent, but you never need to interact with it directly.

How Gold Tokenization Works: A Real-World Asset Primer

Gold tokenization converts ownership of physical gold bars into digital tokens on a blockchain, so you can buy, sell, transfer, or borrow against real gold 24 hours a day without touching the metal. Each token represents a fixed weight of allocated gold held in an audited vault, backed by third-party attestations and redeemable for the physical bar at any time. That combination of real-world value and on-chain programmability is why gold leads the broader real-world asset (RWA) tokenization market today.

What Is RWA Tokenization? Real-World Assets on the Blockchain

RWA tokenization is the process of creating a blockchain-based digital token that represents legal ownership of, or a claim on, a physical or financial asset. The asset can be gold, silver, real estate, a US Treasury bill, a fine-art piece, or any other thing of value. The token lives on a public or permissioned blockchain. Its holder has the same economic rights as if they held the underlying asset directly, but they can interact with it using a crypto wallet from anywhere in the world.

The mechanics involve three layers working together. First, a custodian holds the asset securely and segregates it from its own balance sheet. Second, an independent auditor verifies that the physical asset actually exists and matches the number of tokens in circulation. Third, a smart contract governs token issuance, transfer, and redemption according to rules that no single party can change unilaterally. That three-layer structure is what distinguishes legitimate RWA tokenization from a simple IOU.

By mid-2026, total on-chain RWA TVL (total value locked) had crossed $12 billion, according to aggregators tracking tokenized treasuries, gold, credit, and real estate. That figure was negligible just three years earlier. The Boston Consulting Group projects the tokenized-asset market will reach $16 trillion by 2030, representing an 80x growth from current levels. BlackRock and Franklin Templeton have both launched tokenized US Treasury funds on public blockchains, signalling that institutional adoption is no longer theoretical.

Why Gold Leads RWA Tokenization

Among all real-world assets, gold enjoys structural advantages that make it especially suited to tokenization. Three factors stand out.

Homogeneity. A troy ounce of LBMA Good Delivery gold is identical to any other troy ounce. There is no subjectivity about condition, location, or grade the way there would be with a piece of art or a specific building. One token equals one troy ounce of gold, full stop. That simplicity makes pricing, auditing, and settlement straightforward.

Deep, liquid underlying market. The global gold market trades roughly $130 billion per day across spot, futures, and OTC markets. That depth means the underlying asset has reliable price discovery 24 hours a day, which any token issuer can use as a reference price for redemptions and loan collateral valuations.

Regulatory clarity. Gold is a commodity, not a security in most jurisdictions. That distinction matters enormously for token issuers, because commodity-backed tokens sidestep much of the security-token regulatory complexity that haunts tokenized equities or revenue-sharing instruments. As of 2026, the tokenized-gold market carries an estimated capitalisation of $1.5 to $2 billion, making it the largest single commodity category in the tokenized RWA space.

How Does Gold Tokenization Work? The Step-by-Step Process

Gold bar with blockchain tokenization grid visualization — Tokenization converts physical gold into a blockchain-native digital token backed 1:1 by allocated bullion.

Understanding the lifecycle of a gold token, from vault to wallet, demystifies the technology and shows you exactly what you are buying when you hold one.

Step 1: Sourcing and assaying. The issuer purchases gold bars that conform to LBMA Good Delivery standards (minimum 99.5% fineness, 350 to 430 troy ounces per bar). Each bar carries a serial number, refiner stamp, and assay certificate. LBMA-accredited refiners include MKS PAMP, Valcambi, and Umicore. The assay certificate is the chain-of-custody starting point that every downstream audit relies on.

Step 2: Vault custody and segregation. The bars are delivered to an approved vault, most commonly operated by Brink's or Loomis in Zurich, London, or Singapore. The custodian allocates the specific bars to the issuer's account (meaning those exact serial-numbered bars are yours, not a general pool) and stores them in a segregated vault section inaccessible to the custodian's own assets. This allocation structure is critical: it means your claim survives even if the issuer becomes insolvent.

Step 3: Independent attestation. Before a single token is minted, an independent auditor verifies that the listed serial-numbered bars are physically present in the vault. For Tether Gold (XAUT), that auditor is BDO Italia. For Paxos Gold (PAXG), WithumSmith+Brown performs the attestations. Attestation reports are published on a regular cadence, typically monthly or quarterly, and anyone can cross-check the token supply against the reported bar list.

Step 4: Smart contract minting. Once attestation is complete, the issuer calls a mint function on the token's smart contract, creating exactly as many tokens as the verified gold weight supports. XAUT mints one token per troy ounce; PAXG does the same. The minted tokens appear in the issuer's wallet and are distributed to buyers. The smart contract records every transfer permanently on-chain, creating a transparent audit trail that no party can alter retroactively.

Step 5: Secondary market trading. Once in circulation, gold tokens trade on centralised exchanges, decentralised exchanges (DEXes), and over-the-counter desks. You can buy a fraction of a token, hold a full ounce, or accumulate multiple ounces all within a standard crypto wallet. The token price tracks the spot gold price in real time, with minor premiums or discounts reflecting liquidity and platform fees.

Major Tokenised Gold Issuers in 2026

Several issuers compete in the tokenised-gold space, each with different vault arrangements, chains, and redemption thresholds.

Tokenised Gold Issuers: Key Comparison
Issuer / Token	Blockchain(s)	Vault Location	Auditor	Min. Redemption
Tether Gold (XAUT)	Ethereum, Tron	Switzerland (Brink's)	BDO Italia	430 oz (1 bar)
Paxos Gold (PAXG)	Ethereum	London (Brink's)	WithumSmith+Brown	430 oz (1 bar)
Cache Gold (CGT)	Ethereum	Multiple (LBMA-approved)	Various	1 gram (0.032 oz)
Aurus Gold (AWG)	Ethereum	UK, Switzerland	Inspectorate	1 gram
DGLD (Wrapped DGX)	Ethereum	Singapore (Safe House)	Bureau Veritas	1 gram

Tether Gold and Paxos Gold together account for the majority of the tokenised-gold market capitalisation. XAUT is the asset accepted as collateral on Perfolio's XAUT loan platform, chosen for its Swiss vault custody, LBMA-sourced bars, and BDO Italia attestation frequency.

The Audit and Attestation Chain

The trust in any gold token rests entirely on the integrity of its audit chain. A legitimate chain has four links: refining, vaulting, attestation, and on-chain transparency.

Refining (LBMA accreditation). LBMA Good Delivery bars are produced only by refiners on the LBMA's accredited list. The list is publicly available and updated annually. Bars from non-LBMA sources are not accepted by major custodians, so any token claiming LBMA backing must be able to show a complete chain of title from a listed refiner.

Vaulting (Brink's / Loomis). Brink's and Loomis are the two most common custodians for institutional-grade tokenised gold. Both operate ISO-certified vaults, carry Lloyd's of London insurance covering the full value of stored assets, and provide allocated accounts where each client's specific bars are listed by serial number. The vault operator's insurance is separate from the issuer's own corporate insurance, providing an additional layer of protection for token holders.

Attestation (BDO Italia / WithumSmith+Brown). Third-party auditors physically inspect the vault, cross-reference bar serial numbers against the custodian's records, and confirm that total gold weight equals total token supply. Attestation reports, not mere management assertions, are what give you confidence that "1 XAUT = 1 oz" is true at a specific point in time rather than just a marketing claim.

On-chain transparency. Every mint, burn, and transfer of a gold token is recorded on the blockchain. Because the ledger is public, anyone can verify total circulating supply at any moment. Comparing circulating supply with the most recent attestation report tells you whether the issuer is operating within its verified gold holdings.

How Does Redemption Work?

Redemption is the process of converting your tokens back into physical gold. Most major issuers support redemption for verified, KYC-compliant account holders.

For XAUT, you send at least 430 tokens (equivalent to one Good Delivery bar) to Tether's redemption address and specify a delivery address or vault pick-up location. Tether arranges delivery of the specific bar linked to your tokens within a defined settlement window, typically five to ten business days. You receive the same bar whose serial number is already attributed to your tokens in the public allocation records.

Some issuers like Cache Gold and Aurus support redemption in smaller quantities, starting from one gram. That lower threshold makes physical redemption accessible to retail holders who are not buying entire Good Delivery bars. Cash settlement at spot price is also available from most issuers, though this forfeits the physical delivery option and may attract a small redemption fee.

The ability to redeem for physical gold is what separates tokenised gold from synthetic gold derivatives. You are not just holding a price-tracking certificate; you hold a provable claim on specific allocated bars that you can take delivery of.

Why Gold Tokenization Matters for Lending

Physical gold sitting in a safe does not earn anything. A gold ETF in a brokerage account takes days to liquidate and cannot be used as collateral in a DeFi protocol. Tokenised gold solves both problems by making your gold holding composable, liquid, and programmable.

Composability means your gold token can interact with other DeFi protocols instantly. You can deposit XAUT into a lending vault as collateral and receive stablecoins (digital dollars) within minutes, without selling your gold or waiting for a bank to approve anything. That composability is only possible because both the collateral and the loan exist on the same blockchain.

Liquidity means you can borrow against your gold at 2 a.m. on a Sunday, something no bank or pawnbroker offers. Gold token markets trade around the clock, so the price feed used to calculate your loan-to-value ratio is always live and accurate.

Programmability means the loan terms are encoded in a smart contract that executes automatically. There is no credit check, no human underwriter, and no delay. If the gold price moves against you and approaches the liquidation threshold, the contract notifies you and gives you a window to top up collateral before any partial liquidation occurs. On Perfolio's XAUT loan platform, you can borrow up to 77% of your gold's value, with rates starting from 14.4% APR and no credit check required.

Beyond Gold: Silver, Real Estate, Treasuries, and Art

Gold is the most developed category of tokenised commodities, but the same infrastructure is being applied to other asset classes. Silver tokens (such as AgriDex's tokenised silver) follow the same LBMA-custody-attestation model. Tokenised US Treasury bills from BlackRock's BUIDL fund and Franklin Templeton's BENJI fund collectively manage over $800 million in assets and pay holders on-chain interest daily. Real-estate tokenization platforms in Singapore and the UAE are allowing fractional ownership of commercial buildings. Art tokenization, though early stage, is being piloted by Christie's and Sotheby's through blockchain-based fractional ownership programmes.

Each category brings its own audit and custody challenges. Real estate requires legal title transfer mechanisms that vary by jurisdiction. Art requires provenance chains and condition reports. Treasuries require broker-dealer licences and access to central bank settlement rails. Gold's relative simplicity is why it led the field and why its tokenization model serves as the template for everything that follows.

RWA Market Size and Growth

The numbers behind RWA tokenization have moved from speculative to concrete in a short period. As of mid-2026:

Total on-chain RWA TVL: approximately $12 billion across all asset classes.
Tokenised gold market capitalisation: approximately $1.5 to $2 billion.
Tokenised US Treasuries: approximately $5 billion (BlackRock BUIDL, Franklin Templeton BENJI, Ondo Finance OUSG, and others).
Tokenised private credit: approximately $3 billion (Centrifuge, Goldfinch, Maple Finance).

A Citi research report from 2024 projected that tokenised assets could grow 80x by 2030. BCG's parallel analysis arrived at a $16 trillion figure for the same horizon. Even the more conservative estimates suggest the current $12 billion TVL represents less than 0.1% of the eventual addressable market, which means the infrastructure being built today, including gold tokenization standards and DeFi lending protocols, is laying the foundation for a financial system transformation.

The Regulatory Landscape for Tokenised Gold

Regulation is the factor most likely to determine which tokenised-gold issuers survive and scale. The picture is uneven across jurisdictions but improving.

European Union (MiCA). The Markets in Crypto-Assets Regulation took full effect in December 2024. Under MiCA, asset-referenced tokens (ARTs) backed by commodities like gold must maintain a reserve equal to 100% of outstanding token value, publish regular audit reports, and obtain authorisation from a national competent authority. This framework is the most comprehensive in the world and effectively requires all major gold-token issuers serving EU customers to comply or exit the market.

United States (SEC). The SEC has not yet issued a specific framework for commodity-backed tokens. PAXG operates under a New York Department of Financial Services limited-purpose trust charter, which provides a regulatory mooring without full SEC registration. The ongoing debate between commodity and security classification for crypto assets means US-based issuers operate in a more uncertain environment than their EU counterparts.

Singapore (MAS). The Monetary Authority of Singapore's Payment Services Act covers digital payment tokens, and MAS has signalled openness to tokenised commodities as part of its broader "Project Guardian" initiative for institutional DeFi. Singapore is considered one of the most innovation-friendly regulatory environments for tokenised assets.

UAE (VARA). The Virtual Assets Regulatory Authority in Dubai issued its first crypto licences in 2023 and has since developed specific guidance for commodity-backed tokens. The UAE's position as a major physical gold trading hub makes Dubai a natural domicile for gold-token issuers seeking regulatory clarity alongside access to deep bullion liquidity.

Physical Gold vs Gold ETF vs Tokenised Gold: Full Comparison

Physical Gold vs Gold ETF vs Tokenised Gold
Feature	Physical Gold	Gold ETF	Tokenised Gold (e.g. XAUT)
Settlement speed	Days to weeks	T+1 (business hours)	Minutes (24/7)
Storage required	Yes (safe or vault)	No (held by fund)	No (held by custodian)
Allocated ownership	Yes (you own the bar)	No (pooled trust)	Yes (specific bar serial)
Use as DeFi collateral	No	No	Yes (instant, on-chain)
Fractional ownership	Impractical below 1g	Yes (share fractions)	Yes (sub-ounce tokens)
Physical redemption	N/A (already physical)	No (cash only)	Yes (minimum varies)
Storage / management fee	Variable (home or vault)	0.25%–0.40% per year	0.00%–0.25% per year
Requires broker account	No	Yes	No (crypto wallet only)
Audit transparency	N/A	Annual report	Monthly/quarterly on-chain
Cross-border transfer	Restricted / complex	Restricted (exchange rules)	Instant, borderless

Tokenised gold does not replace physical gold for every use case. If you want to hold gold in your hands, a Good Delivery bar or minted coin remains the most direct route. But for investors who want to use their gold as productive capital, accessing liquidity without selling, or transferring value across borders instantly, tokenised gold offers capabilities that neither physical holdings nor ETFs can match.

For a detailed head-to-head analysis of the two leading tokens, see our guide to XAUT vs PAXG comparison for 2026 and our breakdown of tokenised gold vs physical gold in 2026. If you want to understand the specific token used as collateral on Perfolio, start with what XAUT is and how Tether Gold works.

Frequently Asked Questions

Is tokenised gold safe?

Tokenised gold from reputable issuers (XAUT, PAXG) is backed 1:1 by physically allocated gold bars in insured, LBMA-accredited vaults. Third-party auditors verify the reserves independently. The main risks are issuer insolvency (mitigated by allocated, segregated custody), smart contract bugs (mitigated by independent audits), and custody provider failure (mitigated by top-tier vault operators with Lloyd's insurance). It is not risk-free, but the custody and attestation chain compares favourably with most financial intermediaries.

Can I redeem tokenised gold for physical bars?

Yes. XAUT and PAXG both support physical redemption, though you generally need at least 430 tokens (one Good Delivery bar) for bar delivery. Smaller issuers like Cache Gold allow redemption from as little as one gram. You must complete KYC verification and pay a redemption fee. Settlement typically takes five to ten business days for physical delivery.

How is the gold price tracked in a token?

Gold tokens are priced by redemption arbitrage: if the token trades below the spot gold price, buyers purchase tokens cheaply and redeem them for gold; if it trades above, issuers mint new tokens backed by freshly purchased gold. That two-way arbitrage keeps the token price within a small band of the LBMA AM/PM benchmark. DeFi protocols also use Chainlink or similar oracles that pull the LBMA spot price to calculate collateral values in real time.

What is the difference between XAUT and PAXG?

Both represent one troy ounce of allocated LBMA gold, but they differ in vault location (Switzerland for XAUT, London for PAXG), auditor (BDO Italia for XAUT, WithumSmith+Brown for PAXG), blockchain availability (XAUT is available on Ethereum and Tron; PAXG is Ethereum only), and the regulatory mooring (PAXG operates under a New York DFS trust charter). For a full breakdown, see our XAUT vs PAXG guide.

Do I need a crypto wallet to hold tokenised gold?

Yes. Tokenised gold lives on a blockchain, so you need a compatible wallet (MetaMask, Ledger, Coinbase Wallet, or similar) to hold it directly. Some centralised exchanges also allow you to hold XAUT or PAXG within a custodial exchange account, which means the exchange holds the tokens on your behalf. Holding tokens in your own non-custodial wallet gives you direct ownership; holding them on an exchange means trusting that exchange.

How do I borrow against tokenised gold?

You deposit your XAUT tokens into a lending protocol's smart contract as collateral. The protocol calculates the maximum loan based on your collateral value and the configured loan-to-value (LTV) ratio. On Perfolio, you can borrow digital dollars (USDT) of up to 77% of your gold's value, with rates from 14.4% APR and no credit check. The loan is instant, available 24/7, and you retain gold exposure throughout. See the full details on the XAUT loan page.

What regulations apply to tokenised gold in Europe?

The EU's Markets in Crypto-Assets Regulation (MiCA), which took full effect in December 2024, classifies commodity-backed tokens as asset-referenced tokens (ARTs). Issuers serving EU customers must maintain 100% reserves, publish regular independent audit reports, and obtain authorisation from a national competent authority. Tokens that comply with MiCA provide stronger investor protections than unregulated alternatives. Holders should check whether their chosen issuer has obtained or applied for MiCA authorisation.

What is the total size of the tokenised gold market?

As of mid-2026, the tokenised gold market had an estimated total capitalisation of $1.5 to $2 billion, making it the largest tokenised commodity category by value. XAUT and PAXG account for the majority of that figure. The broader tokenised RWA market, which includes treasuries, credit, and real estate, had crossed $12 billion in total value locked across all protocols and blockchains.