Opinion of: Kevin Rusher, founder of RAAC
It is a volatile world out there. This year, we have seen stocks take a wild trip since gold has pumped and cryptography has been Caht somewhere in the middle. Investors have thrown risk assets and pressed through safe ports. Gold leads the load.
While gold is safe, it is not very hardworking. Unlike cash and treasure bonds, yellow metal does not generate income. Now, more than ever, investors need to be able to gain performance in gold, partly in the Decentralized Finance Sector (DEFI).
The only way to earn money with gold is to buy low and sell high. Most investors do not tend to buy gold like this. That is for a good reason: in the long term, the performance of gold is usually consistent, if not without some peaks and channels here and there, as we have seen recently.
For example, after the financial crisis of 2008, the price of gold rose 148%, but stagnated for almost a decade before the Covid-19 pandemic triggered another manifestation, and it is likely that we see gold, if they do not fall from its revive. While it is still an excellent hedge, the long -term gold history is not a growth story.
Investors prefer US treasures or high -performance savings accounts as part of a balanced portfolio. While gold can exceed thesis assets in uncertain times, it offers a better long -term predictable safety and income balance.
The defi solution
This is where Defi brings innovation to the oldest asset in the world. Defi can a significant modern gold investment, offering speed and transparency or blockchain transactions and the ability to obtain yields.
Currently, thought, most tokenized gold is very similar to keeping it in a background quoted by exchange (ETF). Stablecoin giants such as Tether and Paxos have launched tokens backed by gold, which are backed by physical and audited gold reserves, but sacrifice without performance.
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Most investors defi prefer liquid and negotiable assets such as cryptocurrencies and stablecoins, which can generate attractive yields. Many prefer, for example, to buy the USDT Stablecoin (USDT) and the bet, obtaining rewards while they realize the property.
Perhaps that is why the market capitalization of gold supported by fashion remains. Tether Gold, the world’s most significant gold record, has a market capitalization of just under $ 835 million, for example, while Paxos Gold is in around $ 799 million. Combined, this is equivalent to only 1% of the USDT market capitalization.
Unlock the oldest assets in the world
To unlock the maximum gold potential, we must take tokenization one step further when creating an defi ecosystem where tokenized gold acts actively to work strategies, provided and integrated into performance strategies.
One possibility is that companies such as gold miners are issuing tokenized versions of their reserves that can become stables that can be bet to obtain performance. Delivery protocols whose liquuidity mechanisms allow the stable and asset tokens of the real world (RWA), the holders could take advantage of more performance opportunities through the defi ecosystem.
Beyond the benefits of performance opportunities, blockchain technology means that investors in tokenized gold can benefit from 24 -hour trade flexibility, price discovery almost in real time and almost instantaneous agreement that compromise the stability of the asset.
The future of gold investment
It is, perhaps, ironic that, like governments around the world they are beginning to put their approval seal in digital finances, gold is becoming a highly desirable merchandise again. The public’s interest will grow as governments essentially ratify digital finances. At the same time, the appetite for gold in these uncertain times will also increase.
Defi could unite the thesis and initiate a natural evolution in the property of gold that provides a solid bridge between traditional and digital finances. While gold within traditional markets attracts investors seeking stability, Defi provides opportunities that do not compromise that stability, since it presents new and unique performance opportunities.
Gold has captivated humanity for thousands of years. It is the basis of myths, the standard of wealth and the last coverage against uncertainty. But in the current financial world, you need an update.
By integrating gold into the defi ecosystem, we could unlock its true potential, not only as a reserve of value but as a general income asset. The oldest safe shelter asset is finally on the verge of digital evolution.
Opinion of: Kevin Rusher, founder of RAAC.
This article is for general information purposes and does not intend to be and should not be tasks such as legal or investment advice. The views, the thoughts and opinions expressed here are those of the author alone and do not necessarily reflect or represent the opinions and opinions of Cointelegraph.
