Why VNX Gold

Feb 1, 2022

2021 has seen unprecedented inflation caused by massive liquidity injections and quantitative easing programmes. Inflation in the EU reached 5.3% in 2021, the highest since the euro was introduced.

The VNX team saw a market demand for safe haven assets and we decided to diversify our product portfolio by offering tokenized precious metals and tokenized gold as a first product.

Throughout history, people all over the globe have relied on the value of gold. For more than 5,000 years, the precious metal has been the backbone of finance and has outlived scores of currencies. If we look at the major modern fiat currencies, they’ve lost from 78% (Swiss franc, Japanese yen) to 98% (Indian rupee, Indonesian rupiah) of their value compared to gold (1979-2021).

Through the ages, gold has proven its stability and liquidity and remains one of the world’s most attractive assets. But investments in gold have been complicated by manual and outdated purchase and sale processes, expensive storage, and difficult transportation. VNX solves all these problems with tokenization, opening up a modern and smart way of precious metals investments.

VNX has developed a platform for tokenized precious metals, which allows you to make an investment from anywhere in the world in crypto or fiat, with complete confidence and protection. The first token which will be offered to clients is VNX Gold.

VNX Gold (VNXAU) is an Ethereum token backed by physical gold. Each token is unique and linked to 1 gram of precious metal from a specific bar. The gold itself is LBMA-certified and physically stored in high-security vaults in Liechtenstein (a country with a stable economy, the world’s highest S&P AAA rating, and a member of the EEA). Token generation and all services related to tokens are carried out by a company registered with the Liechtenstein Financial Market Authority.

VNX Gold grants direct ownership of gold, which means the token’s owner can exchange it for real gold at any time. Our clients can collect physical gold in person from the vault or request delivery to anywhere in the world. Bear in mind that metal accounts, ETFs, and other instruments for trading gold do not allow you to own the precious metal directly.

Since the price of the token is linked to the price of gold, in the long run, it’s more reliable than any stablecoin pegged to the dollar, especially considering that the purchasing power of the dollar has fallen by about 63 times since 1700.

VNX Gold has two sources of liquidity: tokens can be easily traded on crypto exchanges and underlined gold can be traded with the world’s major players directly on the VNX Platform.

VNX Gold combines the benefits of gold with the flexibility of crypto assets and DeFi opportunities, providing various interesting use cases:

Traditional investors: access to the liquidity of both gold and cryptocurrency markets;
Crypto traders: as a low-risk hedging tool and diversification of investments in crypto assets;
Lending protocols of the decentralised finance market: as collateral and an asset for borrowing;
Decentralised exchanges: in trading pairs with major stablecoins and cryptocurrencies;
Stablecoins: as collateral;
DAO: as a sustainable asset for the treasury.

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