Gold, with its 10% historical CAGR, serves as a key hedge against inflation in global finance. However, the $22T gold market remains unproductive, hampered by storage costs, trading difficulties, and zero yield. On-chain tokenized gold tokens (Tether Gold, Paxos Gold) have grown to a $1.5B market cap on Ethereum, offering improved liquidity and transparency- yet these tokens remain idle, missing the yield potential that drives asset growth.
The next frontier lies in transforming gold into a yield-bearing real-world asset (RWA). By combining gold's time-tested value with modern on-chain representation and strategies, institutions can both hold gold and generate sustainable returns. This represents the logical evolution of an asset that has, until now, been confined to analog custody systems.
Aarc is building yield infrastructure for GoldFi, enabling tokenized gold to generate returns through yield strategies, leverage, and protocol integrations. Aarc converts Tether Gold (XAUt) - a token issued by TG Commodities S.A and fully backed by LBMA-accredited physical gold - into yield-bearing aXAUt. Through our institutional-grade strategy vaults, XAUt holders can earn consistent, low-risk yields while retaining the potential for gold's spot price and security.
Tokenized gold, such as XAUt, has brought gold's stability to the blockchain, yet these assets remain dormant. While XAUt combines gold's traditional benefits with digital convenience, it generates no yield, no interest, dividends, or staking rewards. This results in higher opportunity costs and slower adoption compared to yield-generating crypto assets. Currently, the $800M worth of XAUt in circulation earns no yield and can't be utilized extensively through DeFi protocols, representing a significant missed opportunity in an ecosystem where even stablecoins and Bitcoin are composable. We think that gold has the potential to evolve beyond being merely an inflation hedge into a productive asset.
Aarc transforms XAUt into yield-bearing aXAUt tokens. When users deposit XAUt into our vault, they receive aXAUt tokens that maintain a 1:1 backing while earning interest. Being an ERC-4626 vault token, aXAUt integrates smoothly with DeFi protocols. Users can trade it like any ERC-20 token, use it as loan collateral, provide liquidity to enhance returns, or farm yield derivatives—all while earning passive income. This approach merges DeFi flexibility with gold-backed security.
Our mission is to empower the productive use and composability of tokenized gold. We will transform gold from a passive store of value into an active, on-chain yield source, seamlessly integrated across DeFi, while maintaining safety, liquidity, and upside potential.
Our vision is to establish tokenized gold as the definitive collateral and yield standard in DeFi, with Aarc providing the institutional infrastructure to unlock secure yield, leverage, and upside for treasuries, institutions, and retail users alike- the true gold standard of Web3.
| Strategic Edge | Institutional Advantage |
|---|---|
| Regulated, Audit-Grade Asset | XAUt is issued by TG Commodities Switzerland and backed 1-for-1 by London Good-Delivery bars held in Swiss vaults. Aarc inherits this compliance shield without introducing new custody or issuance risks. |
| Utility Over Re-Issuance | By building on XAUt, Aarc focuses on yield strategies and integrations rather than duplicating token infrastructure-creating a lean, institution-ready asset. |
| Full Transparency & Redemption | Quarterly attestation reports verify the 1:1 backing, and holders can redeem their assets for physical bullion or cash at market value. Risk teams have access to verifiable proof of reserves along with clear exit options. |
| Plug-and-Play Composability | XAUt's existing presence on major CEXs, DEXs, and some lending markets allows Aarc to integrate seamlessly, enabling immediate deployment for swaps, lending, and perpetuals and a listing proposal on Aave v3 is under discussion. |