Tokenized gold passes DeFi stress test, but less than 2% is used as collateral

A RedStone report found tokenized bullion held up during gold’s sharp sell-off, but DeFi lending adoption remains limited despite surging market growth and trading volumes.

Demand for tokenized gold has surged this year as physical bullion climbed to record highs, but very little of the asset is being put to work in decentralized finance, highlighting a major adoption gap, according to a new report by RedStone.

Tokenized gold spot trading volume reached $90.7 billion in the first quarter as gold futures rallied above $5,600 per troy ounce. Yet only about $63 million worth of Tether Gold (XAUT) and PAX Gold (PAXG) is currently being used as collateral on Aave v3 and Morpho, RedStone said. That’s just 1.5% of the tokens’ combined $4.2 billion market capitalization.

Despite the limited adoption, tokenized gold has already weathered a meaningful market test, RedStone said.

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