10.08.2023Read Time: 3 minutes

After Gold and Silver, Aurus Brings Platinum to Web3

Everything you need to know about platinum, what makes this metal particularly promising and the scale of the opportunity.

When it comes to precious metals, most investors are familiar with gold and silver. Both offer valuable diversification in portfolios and provide a hedge against inflation.

Another precious metal has caught the attention of investors over the last few years. While not as well known, it’s common in everyday life — it’s an important component in auto parts and medical devices, and you may be wearing it on your finger or around your neck.

That metal is platinum. However, despite its appeal as an asset class, it has traditionally been even less accessible than gold and silver to the average investor.

Until now. But before explaining how you can gain exposure to platinum, let’s start by exploring what makes this metal particularly promising and the scale of the investment opportunity.

Platinum

More scarce than gold, platinum is a sturdy, silver-colored metal discovered in 1735. Its rarity is not its only distinctive feature; accessing platinum is no simple feat. While surface mining accounts for over 70 percent of global mineral extraction, platinum is an exception. Most of the world's platinum reserves are found underground, making mining for this precious metal a mainly subterranean endeavor.

According to the World Platinum Investment Council (WPIC), industrial demand rose by an average of 4.6% each year between 1988 and 2018. Its manufacturing applications include the production of fertilizer and bakeware, while, in the medical industry, it’s used in surgical implements and implants. Its properties also make it a suitable component in environmentally friendly materials such as fiberglass, catalytic converters and the fuel cells which power electric vehicles.

Up to 20% of the total demand for the metal over the last five years has come from investors. Consultancy Grandview Research values the platinum market at $US6.5 billion in 2020 and expects it to grow by an annual average of 5% until 2027.

Much of platinum’s appeal is due to its scarcity. The WPIC estimates platinum is 30 times rarer than gold. Around 190 metric tons of the metal is mined each year compared to 3,300 metric tons of gold. In fact, platinum demand has been outstripping supply since 2019. In 2023, the forecast deficit (-983 koz) is 77% deeper than it was projected in Q4’22, and reflecting a 1% decline in total supply and a 28% increase in demand versus 2022. This shortage has directly impacted platinum's price, which as of August 2023 stands at $914.10 USD per ounce — a 46.58% increase since March 2020.

Out of reach

Gaining exposure to platinum isn’t straightforward for the average investor. Unlike gold, platinum bars are typically the preserve of high-net-worth individuals and institutional investors, while platinum coins are only sold in North America. The other option is exchange-traded commodities (ETCs) which track the price of the metal and are listed like shares on stock exchanges, although they aren’t available globally.

There’s a gap in the market for a financial product offering the average investor access to platinum. That’s where Aurus comes in.

Introducing tPLATINUM

Aurus recently launched tPLATINUM (tXPT), one of the first platinum-backed tokens, bringing the metal to the world of Web3. As with tGOLD and tSILVER, Aurus partners with stakeholders in the industry who mint their own tokens on the Aurus platform. Each tPLATINUM token is 1:1 backed by, and redeemable for 1 gram of 99.95% LPPM-accredited platinum, stored in fully insured and audited vaults.

Aurus is an early adopter of decentralized finance (DeFi). The company built the platform on an open-ended blockchain as it removes the risk of a single point of failure associated with centralized exchanges. Unlike centralized approaches, Aurus provides the technology but doesn’t take part in the minting of tokens or have any influence over the physical metal. This distinction underscores our commitment to a decentralized ecosystem built upon the pillars of transparency and security.

The tPLATINUM is now listed on UniSwap. Uniswap is DeFi's largest and most liquid decentralized exchange (DEX), surpassing 30 million active users. Additionally, investors can seamlessly buy Aurus’ gold and silver tokens with a credit card via Wert payment solution — this his alternative will soon be available for tPLATINUM too.

This listing doesn’t just expand the accessibility of precious metals to investors, it also vastly broadens the reach of brokers because they can now sell to customers around the world in a market that is open 24/7.

The future is decentralized

The launch of tPLATINUM is the latest step in Aurus’ mission to democratize the precious metals markets. However, it’s still early days in terms of DeFi. The Global Decentralized Finance Market Size is valued at 14.10 billion in 2022 and is predicted to reach 398.77 billion by the year 2031. As the market keeps innovating and growing, Aurus will continue to leverage it to revolutionize the precious metals industry.