Tokenized Commodities Look Beyond Gold Toward Lending and Energy

Tokenized commodities are moving past passive digital gold ownership and evolving into a broader financial system. Industry executives from firms including Paxos Labs, Theo, and Energy Substantiation argue that placing physical assets onto blockchain networks can do much more than simplify purchasing. They contend these digital representations can connect yield-seeking investors with businesses that require inventory financing, opening markets historically reserved for large financial institutions.

Despite ambitious long-term projections, the sector starts from a modest foundation. Data from CoinGecko shows the total market capitalization of tokenized commodities reached $5.55 billion at the end of March 2026, marking a significant increase from $1.43 billion at the beginning of 2025. Gold-backed tokens issued by companies like Paxos and Tether accounted for nearly 90% of that expansion.

Expanding Into Yield and Silver

Tokenized commodities are blockchain-based digital assets that represent ownership of, or exposure to, tangible goods such as precious metals and crude oil. Paxos, for instance, deploys reserves behind its PAXG token to institutional borrowers. This design allows holders to potentially increase their gold holdings over time as underlying lending rates are paid back in ounce terms, while maintaining standard price exposure.

Bhau Kotecha, co-founder of Paxos' initiatives, notes that accessibility is the primary value proposition. Gold lending has traditionally demanded a scale and network of relationships that many retail investors and smaller entities cannot access. While demand spans individuals, family offices, and institutions, Kotecha cautions that lending returns carry risks, and borrower defaults could erode token values.

Silver represents the next logical step in this evolution. Theo’s thSLVR product passes income generated from institutional silver leases directly to token holders. Iggy Ioppe, chief investment officer at Theo, highlights that silver benefits from robust industrial demand and an established leasing market, though greater price volatility and tighter physical supplies present distinct challenges.

Navigating the Energy Frontier

While precious metals find a comfortable footing, energy markets pose a more complex logistical challenge. Energy Substantiation recently expanded its WTIC token—representing one barrel of West Texas Intermediate crude backed by verified physical inventory—from Ethereum to the Solana network.

JP Thieriot, co-founder and CEO of Energy Substantiation, anticipates strong demand from energy buyers hedging costs, investors seeking market exposure, and suppliers requiring working capital. He suggests that oil tokens could eventually capture a substantial share of the physical oil market over the next decade. However, executives remain divided on the timeline for energy integration, pointing out that continuous motion, storage requirements, and transport make income-generating energy tokens far harder to construct than metals.

Why it matters

The maturation of tokenized real-world assets bridges traditional physical commerce with decentralized finance rails. By turning idle inventory into productive collateral, tokenization introduces liquidity and yield generation mechanisms to asset classes that traditionally relied on slow, legacy settlement systems. If adoption scales as industry participants predict, it could fundamentally alter how corporations finance inventories and how investors gain exposure to raw commodities.

What to watch

Observers will monitor whether issuers can successfully scale energy tokens amid complex logistical hurdles like storage and transport verification. Market participants will also watch if institutional adoption of yield-bearing precious metal tokens broadens, and how regulatory frameworks adapt to blockchain-based commodity lending and leasing products.