24.01.2020Read Time: 7 min

Gold-Backed Cryptocurrency As the Panacea to Global Currency Volatility — What’s New?

Gold trades more than any other financial asset, with daily trading volumes

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Our forebears were not entirely wrong- their instincts were on point when they introduced gold and silver as a universally accepted choice of money to displace the problematic barter system. Indeed money is as old as human civilization. Moreover, we've now come so far as to have agreed on major identifying marks of money: medium of exchange, unit of value, and store of value. 

Sadly traditional gold did not pass the litmus test for money as its inherent indivisibility, amongst other things, made it unsuitable as a medium of exchange. With no one to effectively tweak the idea, the gold standard ended. There's a laundry list of cons to the paper money it replaced, from government-controlled money being used to control and impoverish people to cases of hyperinflation. Wherever you are on the spectrum, we can all conclude that the advent of the fiat currency was a big mistake.

The Attractiveness of Gold

Gold is suddenly looking good now, and for a good reason. Gold trades more than any other financial asset, with daily trading volumes between 67 and 150 billion US dollars. The world was desperate for a solution, so when Bitcoin's Satoshi Nakamoto proposed their idea of money, many eagerly jumped on the bandwagon. 

Since then, over 1500 crypto coins have been invented, without counting the scam crypto coins that have flooded the market since. So, did we finally find the solution to the problems with this new money? The answer is not an unequivocal yes or no. On the one hand, people finally found money they could use without Uncle Sam's prying eyes. On the other hand, however, the problem of hyperinflation remained. But rather than discard our half-win like our ancestors, we continued to tweak the new money, and the idea of a stablecoin was born. An idea so simple and genius — a cryptocurrency that helps cushion volatility by pegging it to something (tangible assets, Cryptos, fiat or algorithmic pegging, etc.).

Sadly the solution to hyperinflation and volatility continues to prove elusive. The world keeps learning and researching, and now it's come to a focal point where a new type of stablecoin is in sight, and early signs show that this is more than just a hyped new wave; it might be the long-awaited panacea for inflation. The idea centers on having a true gold stablecoin. 

The Roots of Gold Stablecoins

A central selling point for gold is its intrinsic value, something traditional cryptocurrencies lack. Gold-backed cryptocurrency combines old school money (gold) and new school money (cryptocurrency). With the first gold-backed crypto dating as far back as 1999, when Douglas Jackson launched E-Gold, this idea is not entirely novel. Since then, several gold-backed cryptocurrencies (if we can truly call it that) have flooded the market. Digix, GoldMint, Xaurum, AnthemGold, Vaultoro, Ozcoin, Zengold, AgAu, Novem, and Darico are a few notable examples. 

However, gold stablecoins continue to face problems of volatility. The problem lies not with the idea but in its execution. In reality, many purportedly gold-backed crypto tokens do not represent actual gold ownership and only allude to equity.

Other attendant problems of gold-backed cryptocurrency include centralized vaults, lack of liquidity, regulatory uncertainty, and non-transparent accounting of gold vaults. If only there was a golden stablecoin to fully embody the characteristics of a truly gold-backed coin and prove once and for all that it is the long-awaited solution to hyperinflation and volatility.

Aurus’ Gold-Backed Crypto Token to the Rescue

This is what Aurus has set out to accomplish. Aurus is interesting for currency stability seekers. Founded in 2018, Aurus has made great strides in replicating the traditional gold market in digital form with its tokenized crypto backed by gold. Its AurusGOLD (AWG) token is an ERC-20 token backed fully with audited gold. Only gold from LBMA-certified refineries is acceptable by Aurus. 

Owning AurusGOLD is equivalent to owning high-quality physical gold and will continue to have a stable value close to gold bullion. Each AWG token is collateralized and redeemable for 1 gram of physical gold. Yes, the real thing. To reiterate, it means that for every AWG token, 1 gram of physical gold is waiting for you in one of the Aurus-approved vaults.

How does this work? Through a thorough vetting process, Aurus will partner with approved gold vaults, global gold brokers, and distribution partners who are the only ones capable of initiating the AWG mining process. 

New golden tokens are only minted after the gold is audited. And in the event of a physical gold withdrawal, the appropriate number of AurusGOLD tokens is burned. What's more, AWG ensures that your gold is fully insured against financial and natural disasters. Your crypto gold token is also independent of Aurus, and you have complete ownership. AWG is primed to become the new money, perfectly fulfilling all the most important features of money and implementing it digitally using blockchain technology. 

Unlike others in the gold-backed crypto market with single centralized vaults and minting processes, through partnering with many local qualified vaults, brokers, and distributors, the Aurus ecosystem will have a network of partners enabling investors to withdraw gold from a location closest to them. AWG's global adoption will be to the benefit of all ecosystem participants.

Benefit From the Gold-Backed Crypto Market

With the cure for hyperinflation in the bag, Aurus is also presenting a way to make their gold-backed crypto profitable to all, which, let's face it, is what most people are really interested in when a new coin hits the market. This is precisely why a secondary coin, AurusDeFi (AWX), an ERC-20 Ethereum-based token, has been incorporated into the Aurus ecosystem to serve as a mechanism to distribute profits across the Aurus network to all stakeholders, including partners and investors. 

Here's how it works. Just like an Ethereum user pays some Ethereum gas to make transactions in Ethereum between wallets, AurusGOLD users will also pay a very minimal transaction fee for trading AurusGOLD. The difference is that Ethereum doesn't share its profit from transaction fees with you, but Aurus will. All the fees are stored in a smart contract and distributed thus: 50% to AurusDeFi stakers, 25% to vault partners, and 25% to provider partners. As a result, both AurusDeFi and AurusGOLD ensure the sustainability of Aurus.

AurusDeFi (AWX) is a scarce digital asset limited to a total supply of 30 million tokens. With AurusDeFi you can benefit from the trading velocity of AurusGOLD as it derives rewards from the tokenization and transaction fees it generates. There is a projected high demand if AurusGOLD survives the test of volatility as it will attract many who wish to take refuge in stablecoins to avoid losses during cryptocurrency bear markets. 

AurusDeFi also has the advantage that, aside from the mandatory Ethereum transaction fees, there are no additional or annual fees associated with AurusDeFi. Tokenized gold will reach its peak potential when it becomes viable as a means of payment for everyday transactions. To that end, arrangements are underway to integrate AurusGOLD in as many payment gateways as possible to drive its adoption as a store of value. AurusDeFi value will increase over time as more and more users adopt AurusGOLD, which is why investing in AurusDeFi is an intelligent choice. Now is the time to use your volatile fiat to purchase gold-backed crypto tokens that can preserve their purchasing power.

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