Gold has long since been a safe asset for investors over the past millennia. So with the introduction of digital currencies, it only made sense that blockchain innovators would look for ways to develop a sustainable solution for a gold-backed cryptocurrency.
Aurus is a UK tech company looking to replicate the gold market digitally. By offering a gold crypto token, Aurus makes it easier for users to spend gold anywhere. In addition, blockchain transactions are cost-efficient and virtually instant globally, which makes using gold as a globally viable means of payment an option.
Aurus empowers precious metals with blockchain technology, offering two ERC-20 tokens, AurusGOLD (AWG) and AurusDeFi (AWX). This guide will delve into the latter and provide all the details you need to know.
Aurus' core token is AurusGOLD (AWG), gold-backed crypto tokenized by the gold industry using the company's blockchain protocol. Each gold crypto token is fully backed and redeemable for 1 gram of LBMA-accredited gold. The Aurus Ecosystem circulates a secondary token, AurusDeFi (AWX), which can be staked to earn rewards generated by AurusGOLD tokenization, transaction, and burning fees.
Simply put, as AurusGOLD tokens are minted (tokenized), and transferred, the native fees generated are collected and evenly distributed staked AurusDeFi (AWX) tokens. This means the rewards you can claim are proportional to the AWX tokens you stake. As the widespread adoption and usage of AurusGOLD increases, so will the rewards generated.
AurusDeFi will also collect rewards derived from future Aurus asset-backed tokens and provide governance voting rights on Aurus ecosystem proposals..
AWX has its maximum supply fixed at 30,000,000. As more users in the ecosystem complete their gold-backed crypto transactions in AWG, 50% of the generated rewards are distributed equally across AurusDeFi tokens staked.
Aurus minting partners are charged a 0.5% fee for tokenizing (minting) new AurusGOLD tokens and a 1% fee for burning AurusGOLD tokens. Transfer fees are set at a modest 0.18% per transaction.
Most people may be confused by the existence of two totally different tokens in the Aurus ecosystem. Is AurusDeFi (AWX) similar to AurusGOLD (AWG)? If not, where does the difference lie? And what's AWX's purpose in the ecosystem?
Well, for starters, the main difference between AWX and AWG is that an asset or commodity does not back AWX. Additionally, its creation process does not involve third parties, as with Aurus’ gold-backed crypto, AurusGOLD.
AurusDeFi tokens are pre-mined and pose as a fundraising mechanism for the business. It is a tool through which holders get to speculate on the transaction volume of AWG. Aurus will maintain ownership of the token, which will not be distributed in the open market. It will, however, be transferable to third parties, and the transaction information will be made available to the public.
Another critical feature to note is that AWX is not a security token. Premiere Law firm Capital Law classifies Aurus' tokens as 'hybrid' tokens, as it exhibits exchange and utility tokens features.
Here's how AWX compares to Exchange and Utility Tokens.
We've already established that AWX is pegged onto AWG. So, how does everything in the Aurus ecosystem work?
There are two key players in the ecosystem; gold-providing and vaulting partners. Gold providers allocate gold bullions towards the system that is stored in partnered vaults for tokenization. Together, these entities interact with Aurus' protocol to mint new AWG tokens independently.
For every gold-backed crypto (AWG) transaction, a modest fee is charged to the initiator of the transaction. The accumulated costs are then distributed between the AWX holder, minting partners, and partner vaults. The AWX holders get 50% of the fees equally distributed to them, while the remaining 50% is allocated to minting partners (25% gold providers, 25% vaults) to cater for operational costs. This reward-sharing mechanism allows the ecosystem to be completely autonomous and independent of Aurus company, mitigating the risk of a single-point-of-failure.
Because AWX's incentives are pegged to AWG transactional fees, holders directly benefit from the increased usage of AWG. When more users in the ecosystem transact in AWG, the generated rewards increase, increasing the amount that AWX holders receive. As such, AWX's value is likely to increase parallel to the usage of AWG.
AWX derives AWG's transaction fees, which makes it a hedge against gold's volatility. As gold is considered a safe asset and a hedge against everything, AWX presents a unique crypto asset. Ultimately, the relationship between AWX and AWG makes the Aurus ecosystem economically airtight.
We cannot deny that a token that allows you to invest in another, backed by gold, is quite lucrative. One of the most valuable features is the price stability offered by having AWG peg its value to that of gold.
The potential that AWX holds hasn't gone unnoticed by crypto enthusiasts. Since the inception of the project, multiple funding rounds have taken place. Just recently, Aurus hosted and finalized a private token sale, successfully distributing a total of 1,000,000 AWX tokens. Aurus will use the money raised from the sale of the AWX to develop the business further.
The future looks promising for AWX. The demand for gold-based crypto has continued to grow, and partners have committed to delivering more gold. Besides, Aurus is currently holding talks with potential partners, including banks, mining operators, and refineries, who all want to join the ecosystem.
Undoubtedly, AWX and Aurus, in general, are revolutionizing the way gold is traded. In addition, Aurus has cut out a niche for itself in the crypto market by providing a gold-backed incentive to AWX holders in the ecosystem.
Gold-backed cryptocurrencies are not a new concept in the space, but a revenue-sharing token tied to one certainly is. AWX holders get the opportunity to bank on the future of AWG, which is well on its way to changing how global payments are made. This is something that will strike a chord in the crypto world and that many enthusiasts will love.