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1. Tokenized Commodities Seek a Role Beyond Holding Gold
The market for commodities represented on blockchains is still dominated by gold, but executives building products in the field argue that its next phase will look quite different. Rather than simply letting investors hold a digital claim on a bar of metal, they want to turn those claims into working assets: instruments that earn income, can be pledged as collateral, and help businesses finance physical inventory.
Leaders at Paxos Labs, Theo and Energy Substantiation, usually shortened to EnSub, laid out that view in recent comments. Their companies cover three different corners of the sector, namely gold, silver and oil, and each sees lending and financing as the feature that could carry tokenized commodities from a niche into a broader market.
The common thread is the idea that tokenization should do more than make buying a commodity more convenient. In their telling, the technology can connect investors who want exposure and yield with businesses that need financing against inventory, a business that has traditionally been reserved for large institutions with established relationships.
2. A Small Market With a Gold-Heavy Profile
Tokenized commodities are blockchain tokens that represent ownership of, or exposure to, physical assets such as gold, silver and oil. Each token is meant to correspond to a defined quantity of the underlying material held in custody, so that a holder can trade the token instead of dealing with storage, insurance and transport of the metal or fuel itself.
The segment remains modest in size. Data from CoinGecko shows that the market capitalization of tokenized commodities reached $5.55 billion at the end of March 2026, compared with $1.43 billion at the start of 2025. That is close to a fourfold increase over roughly fifteen months, yet the total is small next to the traditional commodity markets that these tokens aim to serve.
The growth has been highly concentrated. Gold-backed tokens issued by Paxos and Tether accounted for almost 90% of the increase. The sector's expansion to date has therefore been largely a story of one precious metal and two issuers, which is the context in which the executives describe diversification into other metals and into energy as the next challenge.
Understanding that baseline is useful when weighing the executives' optimism. A product category that is small and dominated by a single metal can grow quickly in percentage terms, but sustaining that growth requires new asset types and new uses to attract fresh buyers, which is precisely what the companies quoted here are attempting to supply.
3. Paxos Labs Sees Lending as the Next Stage
For Paxos Labs, the next step is to put tokenized gold to work. The company's product, PAXGy, is backed by PAX Gold, the gold-linked token known by the ticker PAXG. In the structure described, the reserves behind the product are lent to institutional borrowers, and the interest earned is passed back to holders.
Notably, that interest is paid in ounces of gold rather than in dollars. A holder can therefore potentially increase the quantity of gold they own over time while still retaining exposure to the metal's price. The holdings are designed to become redeemable for a growing amount of PAXG as the lending income accrues.
The mechanism addresses a long-standing feature of gold ownership. Physical gold is a store of value, but it does not generate a return on its own, and holders who want income have usually had to look elsewhere. Lending the metal to borrowers who need it is an established practice among large financial institutions, and the proposition is to extend access to it through a token.
4. Access Is the Central Appeal
Bhau Kotecha, co-founder of Paxos Labs, says access is the key attraction. Gold lending has historically demanded scale and relationships that many investors do not have, which kept the activity in the hands of banks, bullion dealers and other large players. A token, in his view, can lower those barriers.
Kotecha expects interest from several kinds of buyers: individuals, family offices and institutions. He also points to a further possibility, which is borrowing against PAXGy. If holders could use the token as collateral, it would resemble the way other assets in decentralized finance are used to obtain credit, and would give the product an additional function beyond earning income.
The model carries risks that the executives do not dismiss. Lending returns are not guaranteed, and if borrowers default, the value of the token could be eroded. As with any yield-bearing product, the income is compensation for taking on the credit risk of the counterparties to whom the underlying metal is lent.
5. Silver Becomes the Natural Second Asset
Theo is pursuing a similar approach for silver. Its token thSLVR passes along income from institutional silver leases to holders, while keeping them exposed to the price of the metal. This offers silver a route into the same type of financing market that gold already occupies.
Iggy Ioppe, the chief investment officer at Theo, expects growth to come from existing owners and users of the metals rather than only from speculative buyers. He lists institutions that want productive collateral, refiners that need to finance their inventories, and corporate treasuries that want assets able to settle quickly.
Ioppe describes silver as the natural second commodity after gold. He points to its industrial demand and to the fact that a leasing market for it is already established. The picture is not without complications, though, since silver is more volatile than gold and the available supply is tighter, both of which can complicate how the opportunity develops.
6. Long-Term Forecasts
Ioppe offered ambitious projections for the sector. He foresees a tokenized commodities market worth tens of billions of dollars within five years, and more than $100 billion within a decade. Compared with the $5.55 billion measured at the end of March, those targets imply many multiples of growth.
His horizon extends further still. Within fifteen years, he expects tokenization to be part of ordinary commodity settlement and financing, meaning that the technology would no longer be a separate product category but a standard way in which physical goods are financed and moved between owners.
Forecasts of this kind are by nature uncertain, and they depend on factors beyond the control of any single company, including regulation, the willingness of large institutions to adopt the technology, and the reliability of the physical custody arrangements behind each token.
Even so, the stated ambition shows how the issuers regard their products: not as short-term trading instruments, but as infrastructure for a market that they expect to mature gradually over the coming years.
7. Oil Presents a Heavier Logistical Test
The oil market is a larger and more complicated proposition. Barrels are stored in tanks, moved through pipelines and shipped by sea, which makes it harder to show that a given token is genuinely backed by a specific quantity of crude. EnSub nonetheless sees a substantial opportunity there.
The company expanded its WTIC token from Ethereum to Solana on October 2. Each WTIC token represents one barrel of West Texas Intermediate crude oil, backed by verified physical inventory, according to the company's announcement. Making the token available on a second blockchain widens the set of wallets and applications that can use it.
JP Thieriot, EnSub's co-founder and chief executive, says tokens for natural gas and Brent crude are in development. He expects demand from energy buyers who want to hedge their costs, from investors seeking exposure to the sector, and from suppliers that need working capital. He further predicted that oil tokens could account for a quarter of the oil market within ten years.
8. Executives Differ on How Fast Energy Can Follow Metals
The speakers did not entirely agree on how quickly energy can follow the path laid by precious metals. Ioppe argued that storage and transport make income-generating energy tokens harder to build than their metal counterparts. Gold and silver can sit in a vault for years, whereas oil and gas are bulky, flow continuously and are subject to quality and delivery conditions.
Thieriot acknowledged the difficulty from a different angle. For commodities that are constantly in motion, he said, verifiable inventory, workable custody and settlement are essential. Without them, a token would be a promise that cannot be checked, and the trust that gives tokenized assets their value would not hold.
The disagreement is one of pace rather than direction. Both executives see energy as a possible market, but they differ on how much groundwork is needed before tokens linked to it can offer the same kind of yield that is now being developed around metals.
9. What Will Decide Whether the Sector Grows
The comments point to a shared conclusion: expansion depends on linking tokens to reliable physical markets and giving owners a clear reason to use them. A token that merely tracks a price competes with exchange-traded funds and futures contracts that already do the job. One that earns income, serves as collateral or settles quickly offers something those instruments do not.
The hurdles named by the executives are practical ones. Custody must be trustworthy and auditable, logistics must be manageable for moving goods such as oil, and borrower risk must be contained so that lending yields are not undone by defaults. Each of these concerns the real-world side of the arrangement rather than the technology of the blockchain itself.
If those conditions are met, the market could evolve from a gold-dominated product into a broader system for financing metals, trading energy and borrowing against physical assets. If they are not, tokenized commodities may remain a small corner of digital finance, with growth limited to simple price exposure.