There is a lot of talk about XAUT, the tokenized form of gold, as a fresh approach to putting DeFi to work. Take a $2,130 position on Uniswap V3 for instance: it has produced some numbers, raking in $180.50 with a 3.58% yield.
How Tokenized Gold XAUT Works
In essence, XAUT is a digital stand-in for the value of an actual gold bar, only you get the perks of the blockchain. There is no need to worry about the logistics of moving or storing physical metal; you can keep XAUT in a wallet and make trades around the clock, no bank run required. It is the kind of modern solution we have been talking about on Pro Blockchain Media Live – for anyone seeking the security of gold but with a bit more flexibility.
Earning Income with XAUT on Uniswap V3
Tokenized gold in the form of XAUT has a distinct edge: it opens up a way to make some extra money on DeFi platforms such as Uniswap V3. The process is straightforward—put your liquidity into an XAUT/ETH pair within a set price band and you will be paid from the trading fees. Take one position, for instance, with a value of $2,130; it has put $180.50 in the pocket in the form of fees, which works out to an annualized 3.58%. As Pro Blockchain Media Live would have it, this is how you can have your gold work for you instead of just sitting on the shelf.
Minimizing Traditional Risks and Costs
XAUT, the tokenized form of gold, lets investors set aside a good deal of the trouble and expense that comes with the physical metal. You won’t have to worry about storage and transport fees, or any devaluation from a mishandled package. Since it is 100% digital, XAUT is as liquid as it is easy to move around, a sensible way to add some variety to a portfolio or to make forays into DeFi.
That said, there is a learning curve when it comes to handling XAUT on Uniswap V3, as the Pro Blockchain Media Live team has pointed out. One has to be mindful of things like a change in the price band or an asset ratio moving in an unexpected direction; these can have an effect on what is earned. It is important to have a firm grasp on smart contracts before getting involved.
Source — Pro Blockchain Media Live: https://www.youtube.com/watch?v=Pznjwp1_a20
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