XAUT offers an alternative to holding physical gold. The traditional market still lacks a low-cost way for investors to gain direct exposure to the price of physical gold.
XAUT will combine the best of three distinct worlds:
The Tether team hopes to achieve this by applying the technology and functionality of Tether’s fiat-backed Stable Coins to physical gold. XAUT will attempt to mobilize gold markets, significantly lowering barriers to entry for non-institutional investors in the process.
XAUt will mirror Tether’s existing products in many ways, but there are several important differences, including the creation of a new entity that will issue XAUt tokens, Tether Gold.
There will be similarities between XAUT And Tether's existing products, but there are important differences, for example XAUT tokens will be issued by a new entity (TG Commodities Limited).
Each individual XAUT token represents 1 troy fine ounce of London Good Delivery gold held in a vault in Switzerland, and will be capable of being fractionalized up to six decimal places (i.e. increments as small as 0.000001 troy fine ounce).
Holders of XAUT will be able to redeem their tokens for the associated physical gold, subject to the payment of fees and minimum redemption requirements. The gold will be delivered at a location of the holder’s choosing in Switzerland. Rather than take physical delivery in Switzerland, a holder can ask Tether Gold to make arrangements to attempt to sell the gold and take the proceeds from that sale.
When an on-chain transaction transfers XAUT from its initial on-chain address (A) to a second on-chain address (B), the Tether website will reflect that some of the physical gold previously associated with A moved to B. Gold associated with other on-chain addresses won’t be impacted by this transaction.
Where needed (e.g., to support a redemption or to mitigate fractionalization), the physical gold associated with the XAUT held at on-chain addresses can be consolidated. This reallocation will happen instantly so that each XAUT token will always represent ownership of physical gold on a particular gold bar.
In order to either purchase or redeem XAUT with Tether Gold, users will be required to complete an identity verification process, agree to a set of specific terms for service for XAUT and meet applicable purchase or redemption minimums.
Tether Gold (XAUT) can be used in the following cases:
Highly Mobile ‘Safe-Haven’ Asset
Physical gold has long been held as a safe-haven asset. However, with its physically cumbersome nature, physical gold is difficult and costly to transact with and store. By imbuing a digital token with the economic characteristics of physical gold, XAUT removes a great deal of friction and cost associated with holding the underlying asset.
While the physical gold itself will largely remain in vaults, XAUT will enable certain economic qualities of gold – e.g. ownership, value – to flow seamlessly around the world.
Liquid & Effective Portfolio Hedge
Being un-pegged from the global monetary system, many investors include gold in their portfolios as a hedge against financial instability. However, although numerous gold-related investment products exist today, it has historically been costly and burdensome for non-institutional investors to gain exposure to physical gold, particularly smaller quantities.
Lower cost gold-related investment products are widely available, but these often lack the liquidity and hedge effectiveness of physical gold itself. By allowing smaller denominations at wholesale prices, XAUT will democratize access to physical gold as an asset class.
Sovereign-Neutral Monetary Unit
The broadest use case of XAUT is as a sovereign-neutral monetary unit. By unbundling and repackaging the monetary principles associated with gold and bitcoin, respectively, users will gain access to a money-like asset that has the scarcity-basis and price stability of gold.
While many herald bitcoin’s lack of political affiliation and the resistance to censorship that this implies, physical gold was the original sovereign-neutral monetary unit.
Tether claim that tether gold will be a easy access token that will be both available on the the Ethereum blockchain (ERC-20 token) and on the Tron blockchain as a (TRC20 token). They also state that you will be able to trade the token anytime, anywhere. All purchases and redemption will be in U.S. dollars.
Tether Gold will purchase, or arrange for the purchase of London Good Delivery gold from a gold dealer in Switzerland, which will then be securely stored by a custodian in a vault in Switzerland. The gold will be insured by the custodian, and held for the benefit of XAUT token holders, not for Tether Gold.
As with Tether’s existing products, and unlike some other gold-backed Stable Coins, Tether will not charge ‘gas’ fees. The only fees will be on issuance and redemption.
Allocation
One XAUT gives you ownership of Gold equivalent to one ounce. XAUT allows you to query the gold block or blocks you own using a unique serial number. Tether gold will be providing a website that allows you to track your gold (link will be provided when available).
The gold will be insured by the custodian, and held for the benefit of XAUT token holders, not for Tether Gold. As with Tether’s existing products, Tether will not charge ‘gas’ fees unlike some other gold-backed Stable Coins. The only fees will be on issuance and redemption.
Redemption Options
To buy XAUT directly from Tether Gold verified users will be required to purchase a minimum of 50 fine troy oz of gold (i.e. 50 XAUT tokens) and pay the cost to purchase the gold in the Swiss gold market plus a 25 bp fee. To redeem XAUT for the physical gold associated with it, the holder must have a minimum of 430 XAUT tokens (i.e., 430 fine troy oz of gold). Redemption can only occur with full bars of gold, and gold bars are not exactly 430 fine troy oz.
Traders of Bitfinex got the ability to trade the stablecoin XAUT with a maximum of 5x leverage. Bitfinex also pumps up BTC/USD margin trading pair to the same maximum.
Last week Bitfinex presented a new stablecoin Tether Gold. It is backed by the gold bars hidden in the unknown Swiss vault. Tether claimed that they have ‘direct access’ to the vault. The margin trading option as announced on Tuesday, against the U.S. dollar, Tether and BTC. The initial equity can be 20%.
More Information Here
Exodus
First, we have Exodus, which supports a ton of other cryptocurrencies along with XAUT and is pretty straightforward and easy to use. Just download the app from the official site(exodus.io) and get straight into creating your wallet. Exodus stores your Private Keys on the machine you choose and not on any server, providing you with a relative peace of mind when it comes to the security of your coins.
Atomic Wallet
Another option is Atomic Wallet.
Atomic Wallet is a desktop wallet built with security, anonymity and decentralization in mind. Atomic Wallet was designed to leverage the potential of atomic swaps and become part of a fully-fledged decentralized cryptocurrency ecosystem. The “physical” wallet itself is a PC application that can be downloaded onto your computer. Your private keys and other data will then be stored on your PC in an encrypted form. This means you hold your own keys, which are encrypted and kept only on your own device, control your own funds and can efficiently swap tokens without needing to go through a centralized exchange.
This application then interacts with the blockchains of supported coins. For example, if you check your transaction history in the program, it looks it up on the blockchain and then shows it to you, rather than storing this potentially sensitive information somewhere.
Being based on the ERC-20 standard means that XAUT is supported by both the Ledger and the Trezor.
Ledger
As for using the Nano Ledger S, the first step towards setting up your device is unboxing it and checking if you have received all the accessories with the device. Once you have it unboxed, you need to configure it and initialize it before being able to use it. The process is quite simple and will hardly take about 20-30 minutes post which you will be set to use your Ledger Nano S device.
Before you start
Install the Ethereum app
Next steps
Setup guide video for Ledger: here
Trezor
As for Trezor, installing is really simple. To properly install it users should attach the unit to the computer. After that continue with installing the bridge which allows the Trezor to join with the computer. The first step is to connect the Trezor to device’s USB slot with the cable given in the box. After that, go to myTrezor.com and proceed with installing the browser extension. Trezor can also be used on Android or an iPhone, or on a Windows or Mac computer. Now, initiate the extension and myTrezor will direct you to pick a PIN. After this, you will notice nine buttons but the numbers are hidden. After this, users should check the Trezor’s screen to recognize which numbers are in which place because it switches every time. Now set the PIN. Shortly after, Trezor should present a 24-word wallet “seed”. In short, one word at a time. Note down this seed and save it carefully. If your Trezor device malfunctions or is lost, you can utilize the seed to reconstruct the complete wallet.
Setup guide video for Trezor: here
XAUT, like its regular counterpart, is also based on the ERC-20 Ethereum standard, meaning it can be housed in most ERC-20 supporting wallets.
MyEtherWallet
For an online-based wallet, we recommend MyEtherWallet. The wallet offers a brilliant combination of speed, trustworthiness and simplicity, making it the most popular online wallet for ether and any ERC20-based tokens.
Simply visit myetherwallet.com and set up your wallet with a method of your choosing, just make sure to store your private key somewhere safe. It's wise to have it written down on paper in case your PC/notebook malfunctions.
The only downside to using an online wallet like MEW is that there are literally hundreds of phishing scams out there to get your tokens, so you better double check the address everytime and make sure to watch out for any malicious activity on your browser or PC.
You can buy XAUT tokens through a verified TG Commodities Limited account, you can open one here.
Minimum Purchase
The minimum purchase is 50 XAUT, or 50 fine troy ounces (at December 2019 prices 50 XAUT will cost about 75,000 US Dollars). All purchases will be in US Dollar.
Given that XAUT tokens are divisible, investors can customize the size of positions they take up. The lowest increment of XAUT is 0.000001
