Paxos Labs and Theo bet tokenized commodities can do more than sit there

Tokenized Commodity Tokens Earning Their Keep

Introduction

Tokenized commodity tokens are expanding their offerings beyond tracking gold prices, aiming to earn their keep in the market.

The Market

Tokenized gold trading volume hit $90.7 billion in Q1 2026, exceeding the total for all of 2025. More than 450,000 wallets hold tokenized commodities, a figure that has climbed year over year.

The Firms

Paxos Labs launched PAXGy on September 24, 2026, backed by PAXG, the firm's existing tokenized gold product. Theo introduced thGOLD in January 2026, yielding approximately 2% from gold lending. Theo then widened its scope in September 2026, rolling out tokenized silver backed by $40 million in active leases.

Yield-Bearing Products

Products like PAXGy and thGOLD emphasize DeFi composability, institutional-grade custody, and a path into traditional lending markets. Composability means a token can plug into other on-chain applications, serving as collateral or liquidity elsewhere while still earning its base yield.

What This Means for the Market

Gold leasing has traditionally been a business for institutional players, and wrapping it in a token could bring that yield to a far wider audience. Any yield from leasing depends on borrowers honoring their obligations, so returns come with counterparty exposure that plain spot tokens do not carry.

Conclusion

Tokenized commodity tokens are pushing yield-bearing products into a market worth over $5 billion, aiming to earn their keep beyond tracking gold prices.