Tokenized commodities expand into lending and oil products beyond gold

Tokenized commodities are expanding beyond gold into lending markets and energy products, potentially unlocking blockchain-based financing for assets traditionally reserved for large institutions. The sector could grow to over $100 billion within a decade if companies solve custody, logistics and borrower risk challenges.

• Tokenized commodities market reached $5.55 billion by end of March 2026, up from $1.43 billion at start of 2025.
• Paxos Labs’ PAXGy token generates lending income by deploying gold reserves to institutional borrowers, allowing holders to accumulate more gold.
• EnSub expanded its oil token to Solana on October 2 and is developing natural gas and Brent crude products for working capital and hedging.

• $5.55B Tokenized commodities market cap at end of March 2026
• $1.43B Market cap at beginning of 2025, showing 288% growth in 15 months
• 90% Share of growth accounted for by Paxos and Tether gold tokens
• $100B Projected tokenized commodities market size within one decade

CoinDesk reported that executives at Paxos Labs, Theo and Energy Substantiation view tokenized commodities as more than a mechanism to track prices or ease buying. They argue blockchain networks can connect investors seeking income with businesses needing inventory financing, expanding access to markets historically closed to smaller players. The sector’s foundation remains narrow: gold and silver tokens dominated growth through March 2026, but the infrastructure now supports lending, energy products and collateral financing that could broaden the addressable market substantially.

Paxos bets on gold lending to unlock smaller investors

Paxos Labs is deploying PAXGy tokens to institutional borrowers, structuring the product so that lending income accrues to token holders in the form of additional gold. Each PAXGy token is backed by PAX Gold and designed to become redeemable for more PAXG as underlying lending rates are paid back in ounce terms, effectively allowing holders to accumulate gold while maintaining price exposure.

The big proposition is access.

Bhau Kotecha, co-founder of Paxos Labs

Kotecha told CoinDesk that gold lending has historically required scale and relationships unavailable to many investors. He sees potential demand from individuals, family offices and institutions, with borrowing against PAXGy as a possible subsequent step.

The model carries risks. Lending returns are not guaranteed, and borrower defaults could erode the token’s value, creating a trade-off between yield and security for holders seeking exposure to the metal’s price alone.

Silver and energy tokens address different financing needs

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 forecasts a tokenized commodities market worth tens of billions within five years and more than $100 billion within a decade, with silver as the natural second market after gold.

Ioppe sees growth coming from institutions seeking productive collateral, refiners financing inventory and corporate treasuries seeking assets that settle quickly. Greater volatility and tighter available supply of silver complicate the opportunity but also strengthen the case for tokenization among users with established leasing relationships.

Oil presents larger logistical challenges and, in EnSub’s view, substantial upside. EnSub expanded its WTIC token from Ethereum to Solana on Friday (October 2), with each token representing one barrel of West Texas Intermediate crude backed by verified physical inventory. Co-founder and CEO JP Thieriot said natural gas and Brent tokens are under development.

Energy tokenization faces custody and settlement hurdles

Thieriot expects demand from energy buyers hedging costs, investors seeking exposure and suppliers needing working capital, predicting oil tokens could account for a quarter of the oil market within 10 years. The executives differ on how quickly energy can follow metals into widespread tokenization.

Ioppe argued that storage and transport make income-generating energy tokens harder to build than precious metals products. Thieriot countered that “verifiable inventory, workable custody and settlement” are the essential prerequisites for commodities continuously in motion.

Expansion will therefore depend on connecting tokens to reliable physical markets and giving owners a compelling reason to use them over existing financing mechanisms. The path forward requires solving not just technology but logistics, custody infrastructure and borrower creditworthiness across multiple asset classes.

The BlockWest read. The sector’s growth reflects a shift from passive price exposure toward productive yield. Institutions already hold commodities; tokenization succeeds only if it beats existing financing costs. Borrower defaults in PAXGy or thSLVR would demonstrate that blockchain settlement and custody remain the easy part, while creditworthiness assessment remains the hard one.

The critical test arrives as EnSub scales oil and natural gas tokens beyond Ethereum and Solana. Within 12 months, the market will reveal whether energy companies adopt tokenized working capital at meaningful scale or whether storage, transport and regulatory fragmentation keep oil financing in traditional channels. Ioppe’s forecast of $100 billion by 2036 assumes that happens; Thieriot’s prediction of oil tokens capturing a quarter of the market by 2036 hinges on verifiable inventory systems and custody arrangements that do not yet exist at commercial scale.

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