Tether Gold (XAUt) is expanding with a new version, XAUt0, designed to operate across multiple blockchains. Built on LayerZero’s OFT standard, XAUt0 allows users to move gold-backed tokens between networks without the risks associated with traditional bridges or wrapped tokens. Lorenzo R, co-founder of USDt0, explains the technical and strategic advantages of this development, as well as the future vision for crypto and commodities.
XAUt0 is a step forward in Tether’s multi-chain expansion, following the success of USDt0. While XAUt existed solely on Ethereum, XAUt0 extends the asset across multiple blockchains, eliminating liquidity fragmentation and avoiding legacy solutions. The token operates like other ERC20 tokens but offers greater interoperability for users.
Each XAUt0 token represents one fine troy ounce of LBMA-standard gold held in a Swiss vault. Legally, the token is backed by physical gold, with TG Commodities S.A. holding the legal title to the gold. Token-holders can claim their gold by verifying their account with TG Commodities, a process governed by Swiss law. Redemption requires sending XAUt0 back to Ethereum before proceeding with TG Commodities for the physical asset.
Unlike gold ETFs or crypto-backed tokens, XAUt0 offers direct ownership of the underlying gold, not just exposure to its price. The reserves backing XAUt0 are auditable on-chain, and each token is supported by a corresponding XAUt token on Ethereum. These XAUt tokens are then audited by TG Commodities. This model ensures a more transparent and secure approach to owning gold compared to other financial instruments.
XAUt0 is often described as a stablecoin because it’s pegged to gold rather than USD. From a regulatory perspective, it is a stablecoin that combines the inflation-hedging properties of gold with the accessibility of digital assets. It is not treated as a security but as a representation of XAUt on different blockchains.
To ensure security, XAUt0’s smart contracts and LayerZero integrations are thoroughly audited. LayerZero’s protocol includes fail-safes like dual DVN verification and endpoint validation, which ensure the security of USDt0 reserves. Additionally, the project maintains a large bug bounty program, with contracts verified and audited for added protection.
XAUt0 was first deployed on Telegram’s TON network through Wallet in Telegram. This decision was driven by a long-standing relationship with the TON team and their shared vision of making physical assets like gold accessible and easy to use in decentralized ecosystems. More chains will join the XAUt0 network soon, with some focusing on DeFi.
Looking ahead, Tether aims to expand its tokenized commodities into other sectors, including oil and silver, based on demand and growth potential. The broader vision is to bring Tether assets to the most promising chains, ensuring long-term value for the ecosystem.
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