A New Narrative in the $5,000 Era: The Return of the "Old King"—How to Understand the Tokenization Logic of Gold?

Written by: imToken

If someone had told you a year ago that gold would quickly rise to $5,000 per ounce, most people's first reaction would probably have been that it was wishful thinking.

But that's the reality. In just half a month, the gold market, like a runaway horse, tore through several historical levels of $4,700, $4,800, and $4,900 per ounce, and with almost no turning back, it reached the $5,000 mark that the market was collectively watching.

Source: companiesmarketcap.com

It can be said that after repeated verification of global macroeconomic uncertainties, gold has returned to its most familiar position—as a consensus asset that does not rely on any single sovereign commitment.

But at the same time, a more practical question is emerging: as the consensus on gold returns, are traditional holding methods no longer able to meet the needs of the digital age?

I. The Inevitability of Macroeconomic Cycles: The "Old King" Returns to the Throne

From a longer macroeconomic perspective, this round of gold price increases is not a short-term speculative frenzy, but rather a structural correction against the backdrop of macroeconomic uncertainty and a weakening dollar.

Geopolitical risks have extended from Russia and Ukraine to key resource and shipping lane regions in the Middle East and Latin America; the global trade system has been repeatedly disrupted by tariffs, sanctions, and policy maneuvering; and the US fiscal deficit continues to expand, leading to increasingly frequent discussions about the long-term stability of the dollar's credibility. In this environment, the market will undoubtedly accelerate its search for a value anchor that does not rely on the credit of any single country and does not require the endorsement of others.

From this perspective, gold doesn't need to prove that it can generate returns; it only needs to repeatedly prove one thing: that it still exists in an era of credit uncertainty.

This also explains to some extent why BTC, which was once expected to be "digital gold" in this cycle, has not fully assumed the same consensus role - at least in terms of macro risk aversion, the choice of funds has already given the answer, which will not be elaborated here (further reading: " From Trustless BTC to Tokenized Gold, Who is the Real 'Digital Gold'? ").

However, the return of the gold consensus does not mean that all problems have been solved. After all, for a long time, investors have almost only been able to choose between two imperfect ways of holding gold.

The first type is physical gold, which is secure and has complete sovereignty, but it has almost no liquidity. Locking gold bars in a safe means high costs for storage, theft prevention, and transfer, and it also means that it is almost impossible to participate in real-time transactions and daily use.

The recent phenomenon of "bank safe deposit boxes being hard to find" in many places precisely illustrates that this contradiction is being amplified, meaning that more and more people want to hold gold in their own hands, but the reality is not always in line with this.

The second type is paper gold or gold ETFs, which to some extent make up for the physical holding threshold of physical gold. For example, paper gold products issued by bank accounts or securities companies are essentially a claim on financial institutions, giving you a settlement commitment backed by the account system.

The problem is that this liquidity is not complete – what paper gold and gold ETFs provide is liquidity locked within a single financial system. It can be bought and sold under a certain bank, a certain exchange, and a certain set of clearing rules, but it cannot freely flow out of this system.

This means that it cannot be split or combined, nor can it be used across systems with other assets, let alone be used directly in different scenarios. It can only be considered as "in-account liquidity" rather than true asset liquidity.

The first gold investment product I owned, "Tencent Micro Gold," is an example of this. From this perspective, paper gold has not truly solved the liquidity problem of gold, but has only temporarily replaced the inconvenience of physical form with the credit of the counterparty.

Ultimately, security, liquidity, and sovereignty have long been in a state of mutual difficulty, and in a highly digitalized and cross-border era, such trade-offs are becoming increasingly unsatisfactory.

It is against this backdrop that tokenized gold has begun to come into the view of more people.

II. Tokenized Gold: Returning "Full Liquidity" to the Asset Itself

Tokenized gold, exemplified by XAUt (Tether Gold) issued by Tether, attempts to solve more than just the superficial problem of "making gold easier to hold/trade," which paper gold can also address. It tackles a more fundamental issue:

How can we achieve the same level of liquidity and composability across systems as crypto assets without sacrificing the "physical backing" of gold?

If we take XAUt as an example and break down its design logic, we will find that it is not radical, and can even be said to be quite traditional and restrained: each XAUt corresponds to 1 ounce of physical gold in a London vault, and the physical gold is stored in a professional vault that is auditable and verifiable. At the same time, the holder of the tokenized gold has the right to claim the underlying gold.

This design does not introduce complex financial engineering, nor does it attempt to amplify the properties of gold through algorithms or credit expansion. Instead, it deliberately maintains respect for the traditional logic of gold—ensuring the physical properties of gold hold true before discussing the changes brought about by digitalization.

Ultimately, tokenized gold like XAUt and PAXG isn't "creating a new gold narrative," but rather repackaging the oldest asset form using blockchain technology. In this sense, XAUt is more like "digital physical gold" than a speculative derivative in the crypto world.

However, at the same time, the more important change lies in the fundamental shift in the liquidity tier of gold. As mentioned above, in the traditional system, whether it is paper gold or gold ETFs, the so-called liquidity is essentially in-account liquidity— it exists within a certain bank, a certain brokerage firm, or a certain clearing system, and can only be bought, sold, and settled within predetermined boundaries.

XAUt's liquidity is directly attached to the asset itself. Once gold is mapped to on-chain tokens, it naturally possesses the basic attributes of crypto assets, allowing it to be freely transferred, split, combined, and circulated between different protocols and applications without needing to obtain permission from any centralized institution again.

This means that for the first time, gold no longer relies on "accounts" to prove its liquidity, but instead circulates freely globally 24/7 as an asset itself. In the on-chain environment, XAUt and similar tokens are no longer just "tradable gold tokens," but rather basic asset units that can be recognized, invoked, and combined by other protocols.

• It can be freely exchanged with stablecoins and other assets;
• It can be incorporated into more complex asset allocation and portfolio strategies;
• It can even serve as a carrier of value, participating in usage scenarios such as consumer payments;

This is precisely the "liquidity" that paper gold has never been able to provide.

III. From "On-Chain" to "Use": The Real Watershed for Digital Gold

Therefore, tokenizing gold is far from reaching its goal if it only completes the "on-chain" step.

The real dividing line lies in whether this "digital gold" can truly be easily held, managed, traded, and even used as "currency" for consumer payments. In other words, returning to the argument mentioned above, if tokenized gold is merely a string of code on the blockchain and is ultimately still encapsulated in a centralized platform or a single entry point, then it is no different from paper gold.

Against this backdrop, the significance of lightweight self-custody solutions such as imToken Web has begun to emerge. Taking imToken Web as an example, it allows users to access it through a browser—like opening a webpage—and instantly manage their tokenized gold and other crypto assets on any device.

Furthermore, in a self-hosted environment, the private key is completely controlled by the user. Your gold does not exist on any service provider's server, but is actually anchored in a blockchain address.

Furthermore, thanks to the interoperability of Web3 infrastructure, XAUt is no longer a heavy metal dormant in a safe. It can be flexibly purchased as a small asset, and when needed, its purchasing power can be released in real time to global consumption scenarios through payment tools such as imToken Card.

Source: imToken Web

In short, in the Web3 environment, XAUt can not only be traded, but also combined with other assets, exchanged, and even connected to payment and consumption scenarios.

When gold first possessed both extremely high certainty of being a store of value and the potential for modern use, it truly completed its leap from an "old-fashioned safe haven" to a "currency of the future."

After all, gold, as a consensus that has transcended millennia, is not inherently outdated; what is outdated is the way it is held.

Therefore, when gold enters the blockchain in the form of XAUt and returns to individual control through self-custody environments such as imToken Web, what it continues is not a new narrative, but a logic that transcends time:

In an uncertain world, true value lies in relying on the promises of others as little as possible.