Deep dive into VNX Gold with Alexander Tkachenko and Finnovators Podcast

Q: Let’s talk about VNX! So first of all, let’s talk about what is the use case here? Why should somebody buy a VNX Gold token? So what’s the benefit of buying gold that is a token, that’s represented by a token on the blockchain?

A: One of the advantages is transferability. It’s still – one token represents 1 gram of gold, which is stored in Liechtenstein in one of the very big operators of the precious metals. And one token is 1 gram of physical gold. Transferability is one of the key advantages. If you have one kilogram of gold in a bar, it’s quite difficult to transfer it across the borders or just across the continents. The token, on the other hand, can be instantly transferred anywhere in the world. I can send it from Europe and you will receive it in Dubai in less than two minutes.Then you can send it to the USA and it’s still the same one gram of physical gold. So it’s very very transportable in that particular sense and it still holds the value.

Secondly, physical gold is not accessible 24/7. With VNX it’s 24/7, you come, you want to buy, you want to sell – absolutely no problem. And again, in the current market many people are suspicious of the financial products, which do not necessarily represent physical gold. So they are linked to the price of gold, but they’re not necessarily gold themselves. And if the push comes to shove they may just be fooled. So, that’s an additional advantage of the VNX token, it’s backed by physical gold, which is stored in Europe. That probably sums up the advantages, but that’s for the traditional market.

For the crypto market, I think it’s a very very significant hedge against the price volatility. It’s the hedge in the bear markets and it’s a unit of value – preservation, so to say, in the situations where value preservation is necessary. In 2017 I remember everyone was a Bitcoin enthusiast, in 2018 everybody wanted to have payments in dollars in the crypto industry. So VNX Gold is probably for those situations.

Q: Yes, of course, and Bitcoin is sometimes called digital gold and has found that as a use case, but obviously it has a very different volatility profile from real life gold. So, you’re saying that, and I think that is particularly important for gold investors, as opposed to, for instance, oil futures or pork bellies futures investors, that they can actually get their hands on the physical gold, should they at some point desire. So are you saying that it’s a possibility with your token?

A: That’s possible, absolutely. We store gold in one kilogram bars, therefore the minimum amount for the delivery or the pickup is 1 kilogram. Once a person has 1000 tokens, again one token representing 1 gram of gold, he or she can actually request a delivery or pickup of the physical gold. They would need to travel to Liechtenstein, but that is in order to pick it up, if delivery is possible to their country that would be also arranged. But yes, physical gold can, for sure, be received in exchange for the tokens. 

Q: Is the storage of gold itself regulated? 

A: Yes, the facility is also under regulation. From the regulatory point of view they boast the gold trading by the banking, obviously it’s possible to deposit fiat on VNX. As well as tokenization VNX itself is regulated. So the regulators would have a total overview of the process. So in terms of how much money is being deposited, if the money was deposited on crypto we also go through a regulated exchanges, to transfer it into fiat, then to buy gold we use the players who also supervised by the regulators – so the whole chain is under the supervisory control of the regulators. 

Q: Do you charge for that storage?

A: We do not charge for the storage. We, as a company, work on the commission from the token generation or transfer, or the burning of the tokens. In the future we’re planning to launch VNX on different chains. So, we would be charging a fee for the cross-chain transfers.

Q: And in terms of fiats, what do you accept?

A: We accept euro, BTC, ethereum and USDC as the payments. So three cryptocurrencies and one fiat currency. 

Q: Let’s have a look at the current situation, we talked about the crypto winter, it was sparked by the Terra-Luna meltdown and then all the CeFi shenanigans at the same time. So, a bit of a perfect storm at the moment. Is this good or bad for gold tokens? 

A: I honestly think it’s good, it’s not necessarily good for gold tokens, it’s good for all assets that have real use cases or value as opposed to imaginary or, in some particular case, ponzi schemes. Innovation never goes in a straight line, you always have this ups and downs, you have people who exploit innovation.  But in general, my feeling is that the blockchain and crypto industry is moving into the kind of early maturity stage, where a lot of ideas and use cases were discussed, discovered and tried. So it is maturing, it’s becoming more serious. And I think the current time, people call it crypto winter, but, in essence, it’s cooling down, so to say. It is good, because the serious projects, the projects that have value, that are expanding with the use of the blockchain technology, they will continue, they will develop and they will pave the way for the new developments, for the new hype wave, you know. Some years, probably, in front of us. Yes, it’s a necessary pause, I would say. Necessary and inevitable.

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