- The tokenization of assets including valuable metals such as Gold has gained momentum given the opportunities presented by blockchain technology.
- Meld Gold, an Australian crypto-oriented firm, is set to launch a digital asset within this niche in the coming months.
This initiative will be based on Algorand’s blockchain although its prototype had been launched on Ethereum back in 2019. Meld Gold’s collaboration with Algorand will see them leverage the platform’s features which include smart contracts, atomic digital asset transfers and the option to customize crypto tokens.
Meld Gold-backed Tokens
The Australian startup has designed a model where every token issued will be backed by a gram of gold held physically by various entities such as the Melbourne mint. Notably, this will decentralize gold ownership and also eliminate the risk of pegging a significant number of crypto tokens to one gold vault. Meld Gold’s GM, AJ Milne, highlighted that this approach reduces the impact of unsystematic failures;
“Independent vaults will still hold gold, as will refineries as they receive gold. At each of these points in the supply chain, gold tokens can be minted and recorded. No single entity will hold all of the gold (no central point of failure).”
Basically, Meld Gold is set to act as a market maker to boost gold trading through its crypto token ‘Meld’. According to the current layout, the platform will operate on the basics of demand and supply as opposed to limiting its token supply. It, therefore, follows that prospective users will mint and burn Meld Gold tokens as per the prevailing dynamics in crypto and bullion markets.
On the part of fairness and compliance, Milne noted that Meld Gold will be subject to independent audits and action will be taken on malicious actors. Furthermore, interested network participants will have to undergo a vetting process for them to approve.
So far, Meld Gold has partnered with a number of suppliers to complement their gold-backed token ecosystem. It is also set to expand operations into Europe, Asia, and North America in 2021. Given the progress, they have been hailed by prominent stakeholders such as Melbourne Mint’s CEO, Peter August;
“Many companies have tried to create their own version of gold-backed tokens, but what Meld is doing is new: they’re using blockchain technology to not just emulate but improve the actual gold market.”