The tokenized commodities market reached $5.55 billion by the end of March 2026, nearly four times the $1.43 billion at the start of 2025. Gold-backed tokens from Paxos and Tether drove roughly 90 percent of that growth, but the real action is shifting to metals, energy and lending-enabled collateral.
Paxos Labs is moving aggressively into gold lending. Its PAXGy token wraps PAX Gold (PAXG), which trades at $4,183.90 and generates yield from institutional borrowing. The structure is straightforward: holders earn lending fees paid back in ounce terms, meaning PAXGy can accrue additional PAXG over time while maintaining price exposure. The pitch is democratization—gold lending has historically required institutional scale and relationships. Retail, family offices and institutions now have access.
Bhau Kotecha, Paxos Labs co-founder, framed it as solving a real friction: "Gold lending historically required scale and relationships unavailable to most investors." The next frontier is borrowing directly against PAXGy itself. Default risk is real—if borrowers fail to repay, token holders take losses—but that's a standard credit dynamic moving on-chain.
Theo is banking on silver as the natural second asset class. Its thSLVR product routes income from institutional silver leases to token holders while preserving spot price exposure. The target customer is clear: existing commodity players seeking productive collateral, refiners needing inventory financing, and treasuries looking for rapidly settling assets. Silver has tight physical supply and strong industrial demand, but higher volatility than gold complicates the pitch.
Iggy Ioppe, Theo's Chief Investment Officer, is bullish on timelines. He expects the tokenized commodities market to reach tens of billions within five years, exceed $100 billion within a decade, and become standard practice in settlement and financing within 15 years.
Oil is the biggest opportunity and the hardest logistical lift. Energy Substantiation expanded its WTIC token—one contract equals one barrel of West Texas Intermediate crude, backed by verified physical inventory—from Ethereum to Solana on Oct. 2. Natural gas and Brent crude tokens are in development. JP Thieriot, Energy Substantiation's co-founder and CEO, expects significant institutional demand from energy buyers and users.
