Opinion by: Kevin Rashar, founder of RAAC
This is a unstable world. This year, we have noticed that stocks take a wild ride because gold is pumped and Crypto is caught somewhere in the middle. Investors have dumped risk assets and scramble for safe haveon. Gold is leading the charge.
While gold is safe, it is not very hardworking. Unlike cash and treasures, yellow metal does not generate income. Now, more than ever, investors need to be able to earn yield on gold – especially in the decentralized finance (DEFI) area.
The only way to make money from gold is to buy less and sell high. Most investors do not buy gold in this way. This is for a good reason – in the long term, the performance of gold is usually consistent, if not without some peaks and troughs, as we have seen recently.
For example, after the 2008 financial crisis, the price of gold increased by 148%, but the Kovid -19 epidemic stabilized for nearly a decade before triggering another rally, and it is likely that we will see the gold grip, if this new record is not revived in the markets. While it remains an excellent hedge, the long -term track record of gold is not a development story.
Investors like Treasury or High-U-U-U-U-U-U-U-U-U-U-Up savings accounts as part of a balanced portfolio. While gold can improve these assets in indefinite times, it provides security and better balance of estimated income over the long term.
Defi solution
This is the place where Defee brings innovation to the oldest property in the world. Defi, offering the speed of blockchain-based transactions and transparency and ability to earn returns, can make gold investment significantly modern.
Currently, however, most of the tokens are similar to gold, which is similar to placing it in the exchange-treated funds (ETFs). Stablecoin giants such as Tether and Paxos have launched gold-supported tokens, which they say that are fully supported by physical, audited gold reserves, yet there is no yield.
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Most DEFI investors prefer liquid, tradable assets such as cryptocurrency and stabilcoin, which can generate attractive returns. For example, many people buy USDT (USDT) StableCoin and place it at stake, yet earning prizes while maintaining ownership.
Perhaps this is the reason why the market capitalization of gold-supported tokens remains modest. Tather Gold, the world’s most important gold token, for example, is a market capitalization of less than $ 835 million, while Paxos Gold sits at about $ 799 million. United, it is equal to just 1% of the market cap of USDT.
Unlock the world’s oldest property
To unlock the full capacity of gold, we need to take the tokens one step forward by creating a DEFI ecosystem, where the tokens are kept to work actively-integrated into strategies.
There is a possibility for companies such as Gold Miners to release tokens of their reserves that can be converted into stabelin that can then be stake to earn the yield. Leveraging protocols whose liquidity mechanisms enable stabechoin and real -world property (RWA) trading of tokens, holders can take advantage of further yield opportunities in DEFI ecosystems.
Beyond the benefits of yield opportunities, blockchain technology means that investors in tokens can benefit from the flexibility of 24-hour trade, near the discovery of real-time price and near the stability of the property near-meal disposal.
Future of gold investment
This, perhaps, irony that – the way governments worldwide have started applying their approval on digital finance – gold is again becoming a highly desirable object. The interest of the public will increase in this as governments essentially confirm digital finance. At the same time, gold hunger will also increase in these uncertain times.
Defi can bring these trends together and kickstart a natural growth in gold ownership that provides a solid bridge between traditional and digital finance. While gold inside traditional markets attract investors in search of stability, DEFI brings opportunities that do not compromise on that stability, as it presents new and unique yield opportunities.
Gold has fascinated humanity for thousands of years. It is the foundation of myths, the last hedge against the standard and uncertainty of money. But in today’s financial world, it needs upgrade.
Through integrating gold in the DEFI ecosystem, we can unlock its real capacity-only as a store of value but as an income-generating property. The world’s oldest secure shelter property is finally on the verge of digital development.
Opinion by: Kevin Rashar, Founder of RAAC.
This article is for general information purposes and is not intention and should not be taken as legal or investment advice. The ideas, ideas and opinions expressed here are alone of the author and not necessarily reflected or represented the ideas and ideas of the components.
