Tokenized commodities are beginning to develop beyond simple digital exposure to gold prices, with companies exploring blockchain-based lending, silver leases and physically backed energy products. Executives at Paxos Labs, Theo and Energy Substantiation told CoinDesk that the sector could eventually support financing and settlement across parts of the physical commodities market, although custody, logistics and borrower risk remain significant obstacles.
The market is still relatively small compared with traditional commodities. Tokenized commodities had a total market capitalization of $5.55 billion at the end of March 2026, up from $1.43 billion at the start of 2025, according to CoinGecko figures cited in the report. Gold-backed products from Paxos and Tether represented almost 90% of that increase.
Tokenized commodities are blockchain-based tokens intended to represent ownership of, or exposure to, physical assets such as precious metals and oil. Their potential use is broader than allowing investors to track an asset’s price. The companies developing these products are also seeking to connect holders with income from lending and leasing, while giving businesses another way to finance inventories or use physical commodities as collateral.
Gold lending leads the expansion
Paxos Labs is focusing on lending as a possible next phase for tokenized gold. Its PAXGy token is backed by PAX Gold, or PAXG, while the underlying reserves are made available to institutional borrowers. The product is designed so that each PAXGy token can become redeemable for a larger amount of PAXG as borrowers repay lending rates in ounces of gold. Holders therefore retain exposure to gold prices while potentially increasing their gold holdings through the lending activity.
Paxos Labs co-founder Bhau Kotecha said the key proposition is access. Gold lending has traditionally depended on institutional scale and established relationships, making it less accessible to many investors. The company sees possible demand from individuals, family offices and institutions. Borrowing against PAXGy could become another use, although the product’s lending returns are not guaranteed and borrower defaults could reduce its value.
Silver is being positioned as another market where tokenization could combine price exposure with income. Theo’s thSLVR product passes income from institutional silver leases to holders while maintaining exposure to the metal’s price. Theo Chief Investment Officer Iggy Ioppe said potential users include existing commodity owners, institutions looking for productive collateral, refiners financing inventories and corporate treasuries seeking assets that can settle quickly.
Ioppe described silver as the natural market to follow gold because of its industrial demand and established leasing market. The opportunity is more complicated, however, because silver is more volatile and the supply of metal available for leasing is tighter. He forecasts that tokenized commodities could reach a market value of tens of billions of dollars within five years and exceed $100 billion within a decade. He also expects tokenization to become part of normal commodity settlement and financing within 15 years.
Oil brings a harder physical challenge
Energy products could provide a much larger market, but they require a closer link between blockchain tokens and physical supply chains. Energy Substantiation, or EnSub, expanded its WTIC token from Ethereum to Solana on Oct. 2. According to the company’s announcement, each token represents one barrel of West Texas Intermediate crude backed by verified physical inventory.
EnSub co-founder and Chief Executive Officer JP Thieriot said the company is developing tokens for natural gas and Brent crude as well. Potential demand could come from energy buyers seeking to hedge costs, investors wanting commodity exposure and suppliers that need working capital. Thieriot expects oil tokens could represent a quarter of the oil market within 10 years.
The executives involved have different views on how quickly energy products can develop compared with metals. Ioppe said storage and transportation make it more difficult to create energy tokens that generate income. Oil and gas are continuously moved through production, storage and distribution networks, which makes ownership and control harder to verify than for some stored metals.
Thieriot said reliable products will require verifiable inventory, workable custody arrangements and settlement systems suited to commodities that are constantly in motion. The future expansion of tokenized energy will therefore depend not only on blockchain infrastructure, but also on whether companies can connect digital tokens to dependable physical-market operations and offer users a clear reason to adopt them.
Moneyiar market picture
Moneyiar data recorded at 11:29 a.m. on Oct. 11, 2026, showed the following prices and performance:
- Celestia (TIA): $0.5886819289, up 20.68% over 24 hours and 24.82% over seven days.
- eCash (XEC): $0.0000073471, up 1.04% over 24 hours but down 9.27% over seven days.
- Sentient (SENT): $0.0233359086, up 18.38% over 24 hours and down 1.15% over seven days.
- Meteora (MET): $0.4164429762, down 4.02% over 24 hours but up 37.79% over seven days.
These figures describe selected crypto assets and do not measure the size or performance of the tokenized-commodities market. The broader development described above remains tied to the ability of issuers to verify physical reserves, manage custody and logistics, and control the risks associated with lending against real-world assets.
