Gold NFT: GLD NFT
The first product in the gold project is the Gold NFT - GLD NFT. It represents direct ownership of physical gold bars stored in secured vaults in Switzerland and independently audited (KPMG). Owners of the GLD NFT can redeem their gold bars at any time and are directly exposed to the gold market. A more detailed description of all relevant aspects around GLD NFT can be found in the respective whitepaper dedicated to GLD NFT (downloadable on yumi.io/gold/about). The concept is described in the following para- graphs and an overview of the ecosystem is depicted in the figure below.
The base layer for GLD NFT is the ORIGYN protocol which provides the technology infrastructure to run the NFTs. The ORIGYN protocol provides a novel NFT standard that fully integrates marketplace features and governance, setting the basis for a perpetual ecosystem, independent of any central entity. Any upgrades to the NFT need to go through the ORIGYN governance and the Gold SNS has a vote on that with its 500m OGY tokens staked. Here’s a comprehensive explanation of the technical process involved:
SecureEscrow: The Gold project begins with the establishment of a secure escrow system to hold the physical gold bars. A trusted custodian securely stores the gold bars in a designated vault, ensuring its physical integrity and preventing unauthorized access.
Asset Digitization: Once the gold bars are securely stored, the next step involves the digitization of the asset. The ORIGYN Protocol issues a digital certificate that represents the ownership of a specific gold bar. This digital certificate is minted as an NFT, providing a unique identifier linked to the physical gold asset held in escrow.
Escrow Verification: To maintain authenticity and trust, an escrow verification mechanism is implemented. This entails regular audits and verification processes to ensure that the physical gold bars held in escrow align with the digital certificates issued on the protocol. This verification process can involve independent third-party audits, ensuring transparency and accuracy.
Market Integration: The Gold Project integrates with the ORIGYN Protocol’s perpetual marketplace, enabling users to trade, buy, and sell the gold-backed NFTs. This integration ensures that the technical infrastructure supports market transactions, securely tracks ownership, and facilitates the settlement of trades. Bity provides the frontend to the integrated marketplace of the GLD NFT, offering the users a guaranteed market to always purchase and sell their NFTs, and also provide a secondary market where users can trade with other users at secondary market conditions.
To ensure the security and verifiability of the gold-backed assets and tokens, the technical process incorporates robust smart contract mechanisms. This includes using the ORIGYN NFT platform to guarantee the digital certificates are immutably linked to the physical assets in escrow. Additionally, the transparency of blockchain technology allows users to independently verify and validate the authenticity and ownership of the gold-backed assets.
Through this technical process, the Gold project powered by the ORIGYN Protocol ensures the secure and transparent integration of physical gold assets with digital certificates and tokens. The combination of robust custody measures, asset digitization, tokenization, smart contract automation, market integration, and blockchain-based security provides users with a reliable and efficient pathway to participate in the gold-backed ecosystem.
A key element of the price stability of GLD NFT is the fact that users are always able to buy from and sell to BITY marketplace at any point in time. The price is constantly determined by the spot price and buying and selling prices on BITY are defined as follows. The buying price on BITY, i.e. the price at which users can purchase GLD NFT from BITY, is defined as the LBMA spot price plus a fixed premium to cover the production costs of the physical gold bars. This combination yields a price that is similar, even competitively lower, to traditional platforms to purchase physical gold bars. The selling price on BITY, i.e. the price at which the users can always sell back to BITY, is defined as the LBMA spot price minus 3%. This fee is applied to cover the financial risk that BITY undertakes to always offer the option to sell GLD NFT back to them. These two price boundaries, a ceiling and a floor, ensure that the GLD NFT are always traded within those, see figure above. Users can trade on the secondary market with other mar- ket participants at any price they wish. BITY solely guarantees that there are always GLD NFT to buy and sell within the boundaries directly from and to BITY.
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