Folks Finance now allows users to trade, lend, and borrow tokenized gold and silver.
On December 4, Folks Finance—the leading DeFi system on the Algorand network—released tokenized versions of gold and silver.
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Folks Finance now allows users to lend, borrow, and trade the new GOLD and SILVER tokens. Every token has a one-gram backing made of real gold or silver. Meld, a company that facilitates trade in fractionalized gold and silver bars, provides the metals.
A “pivotal step in bridging conventional finance with decentralized finance, unlocking the utilization of real gold and silver in DeFi loans and trades” was how Folks Finance characterized the introduction of its new coins.
People said that they expect to draw in new customers from the traditional banking industry, pointing out that the utilization of real-world assets in web3 has increased recently. On November 22, the protocol also started supporting Stasis’s EURS token, extending the list of tokenized legacy assets that Folks Finance supports.
Folks Finance CEO Benedetto Biondi stated, “This listing is a testament to our commitment to expanding RWA offerings and making DeFi more accessible to a wider range of users.”
DeFi Llama claims that Folks Finance has a $96.5 million locked value. In April 2022, the protocol was introduced.
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This week has seen a surge in gold prices to record highs, coinciding with the debut of GOLD and SILVER on Folks Finance. Analysts have attributed the 18.5% increase in gold from the beginning of October to predictions that the US Federal Reserve’s series of interest rate hikes will eventually come to an end.
RWAs on-chain gain traction
The announcement coincides with the substantial uptake of real-world assets (RWAs) in the cryptocurrency space, as more and more projects are beginning to use US Treasury Bills.
Leading the way was MakerDAO, whose RWA portfolio increased from $17 million to $2.8 billion since the beginning of 2022, with exposure to US Treasury Bills totaling more over $2.35 billion.
USDY, a yield-bearing stablecoin backed by US Treasury bonds and bank deposits, was introduced by Ondo Finance in August.
The Web3 Foundation, the company behind Polkadot, made a $1 million pilot investment in US Treasury Bills last week through Anemoy, an asset issuer on Centrifuge Chain, the RWA-focused Polkadot parachain. The Web3 Foundation announced that it will be increasing its contribution in the future.
However, according to TradingView, the yield on 10-year US Treasury notes has decreased by 15% since hitting a 15-year high of 5% in late October.
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