🌕 Imagine 'gold' as a star, holding the 'value' of the world with the same set of gravitational rules for hundreds of years. The so-called RWA (Real-World Assets on the blockchain) extends this star's gravitational pull into a programmable orbit on the chain. XAUT (Tether Gold) and PAXG (Pax Gold) are the two brightest 'on-chain gold,' both following international gold prices, but their orbits and satellites (compliance, custody, costs, redemption) differ significantly. This article clarifies the seven major questions you care about the most.
🪙 What is XAUT?
It is the tokenized gold issued by TG Commodities under Tether: each XAUT corresponds to 1 troy ounce of physical gold that meets LBMA 'London Good Delivery' specifications, stored in Swiss vaults; holders have 'shared ownership' rights corresponding to specific gold bars marked with serial numbers, purity, and weight, which can be queried on the official website by address. XAUT is currently natively issued on Ethereum (ERC-20) and TRON (TRC-20); starting in 2025, Tether announced the launch of a cross-chain (omnichain) version 'XAUt0' on TON to expand availability.
🛡️ Is XAUT safe?
Look at the three-layer mechanism: first is 'physical gold custody + verifiability' – each holding address corresponds to a gold bar serial number that can be verified on Tether Gold's query page; the second is 'third-party verification' – Tether will provide specific reserve reports for XAUT and obtain reasonable assurance opinions (ISAE 3000) and quarterly disclosures from independent accountants starting in 2025; the third is 'total correspondence' – in Q2 2025, it disclosed that reserve gold exceeded 7.66 tons and revealed circulation at the same time. These allow you to externally verify 'whether there is real gold' rather than just relying on slogans.
🏷️ Does XAUT count as RWA?
Yes – it tokenizes 'certificates of ownership for physical gold,' providing 24/7 liquidity, programmable settlement, and cross-border transfers after being put on-chain, falling under the 'Commodities' branch of RWA.
💸 How does investing in XAUT differ from 'regular gold purchases'? Buying gold off-chain (physical bars, ETFs, securitized notes) typically circulates within a T+2 settlement and traditional custody systems; on-chain gold offers instant, divisible (down to 0.000001 oz), global 24/7 transfers, and XAUT does not charge annual 'custody fees' to holders, only a 25 bps handling fee when initially subscribing/redempting from the issuer (inter-exchange transfers only incur on-chain gas fees). However, note that 'physical redemption' of XAUT from the issuer must be processed in 'whole gold bar' units (Swiss vault delivery), making it unsuitable for those who only want to withdraw small amounts of gold.
⚖️ What are the essential differences between XAUT and PAXG?
PAXG is issued by the regulated Paxos Trust Company in the U.S., supervised by NYDFS, and guaranteed monthly by an external firm (starting in 2025 by KPMG); it supports queries for the specific gold bars allocated to holding addresses. Regarding physical redemptions, redeeming PAXG for a whole 'Good Delivery' gold bar requires at least approximately 430 PAXG, or it can be directly redeemed with Paxos for USD; the token is primarily on Ethereum (ERC-20). In contrast, XAUT is issued by TG Commodities (a subsidiary of the Tether Group) under regulations in El Salvador, provides quarterly attestations, and is natively on ETH/TRON, expanding multi-chain scenarios through XAUt0. Your trade-offs usually lie between 'compliance and verification frequency (PAXG wins)' and 'multi-chain availability and ecosystem coverage (XAUT wins)'.
🧭 Why start allocating RWA (on-chain gold)?
For retail investors, small 'dollar-cost averaging (DCA)' purchases of PAXG or XAUT provide the same exposure to gold prices while retaining the flexibility of on-chain transfers and collateralization (e.g., some platforms accept PAXG as collateral for derivatives or lending); for large investors, the key lies in 'collateral efficiency and liquidation pathways': risks can be asset-backed with a gold standard, expanding capital utilization, but conservative LTV and liquidity thresholds must be set to avoid triggering on-chain liquidations during gold price corrections.
🏪 Buying gold in the cryptocurrency space vs. buying gold in the real world?
Buying gold bars off-chain is clear and compliant, with physical possession, but incurs high transfer and custody costs, and slow settlement; buying XAUT/PAXG on-chain offers near-instant settlement, global transferability, and programmability (for margin, cross-chain settlements), but introduces counterparty risk from the 'issuer/custodian' and jurisdictional risks (XAUT Swiss custody + Salvadoran regulation, PAXG U.S. trust framework + NYDFS). You should decide which one to primarily hold based on your location, tax, and compliance requirements.
🧪 Actionability: How to verify and calculate costs yourself?
🔎 Download the latest reserve report and attestation opinions from the Tether Gold 'Reports' page, comparing circulation and the number of gold bars; then use your holding address on the official website 'Look-up' to check the serial number, purity, and weight. On the cost side: the initial subscription/redemption of XAUT directly from the issuer incurs a 0.25% handling fee with no annual fees, and follows the 'whole gold bar' redemption rules.
🧾 When switching to PAXG, first check Paxos's 'Transparency' page for the latest monthly attestations, then use PAXG Lookup to check the gold bars corresponding to your address; if you want physical gold bars, approximately 430 PAXG is required (depending on bar weight), otherwise, you can directly exchange with Paxos for USD.
🧩 How to choose: XAUT or PAXG?
If you prioritize 'U.S. regulation and frequent verification', want an official channel for 'USD cash redemption', and mainly operate within the Ethereum ecosystem, PAXG would be more suitable; if you value 'multi-chain coverage (ETH/TRON/TON-omnichain) + ecosystem liquidity' and 'no annual fees for long-term holding', XAU₮ would be more flexible. However, neither is a 'solution for immediate small withdrawals of gold bars' – physical redemptions are primarily for whole gold bars; if you want to take small gold pieces, traditional gold merchants may actually be more suitable.
⚠️ Risk symmetry reminder: On-chain gold maximizes liquidity but also introduces new types of risks – smart contracts, cross-chain bridges (especially for XAUt0/DeFi applications), issues of issuance and custody legal risks, and operational risks of exchanges and wallets. Strictly diversifying holding addresses, retaining cold wallets, controlling leverage and LTV, and treating redemption rules (whole gold bars) as part of a dynamic liquidity threshold is a relatively prudent approach.
📌 This article does not constitute investment advice.
@Tether USDT @Paxos #RWA #TokenizedGold
#MooKing See you next time in the classroom
