DeFi Protocol AurumFi Introduces Structured Yield Model for Tokenized Gold

AurumFi is the new DeFi protocol to have arrived on Ethereum Mainnet.

The uniqueness of the platform is its promise of structured yield on USDT deposits backed by strategies involving tokenized gold liquidity.

Developers say that it is the first serious attempt to create a proper infrastructure around tokenized gold assets, PAXG, and XAUT.

According to the official documents, AurumFi’s yield generation mechanics don’t follow the same path as Ethereum staking yield or stablecoin lending. 

With traditional crypto lending, users often get exposed to the crypto market’s volatility. AurumFI, however, adds a sense of stability by focusing on only three gold-linked revenue streams.

They each operate independently. Shielded from the general crypto market volatility, these streams don’t revolve around approvals or KYC.

How Does the AurumFi Protocol Work

Users must first decide the time period for which they want to hold their USDT inside the protocol. While the crypto is held, AurumFi gets to work, routing the capital across three strategies at the same time.

• 58%, Liquidity Provision: A bulk of the liquidity is concentrated on PAXG/XAUT trading pairs. It generates fee revenue based on spot trading volume.
• 28%, Collateral Lending: Loans are backed by tokenized gold assets, PAXG and XAUT. Borrowers come to the protocol and receive USDT. In return, the protocol earns on each position.
• 14%, Funding Rate Capture: Delta-neutral positions on gold perpetual markets (positions that remain stable during volatile periods) capture positive funding rates.

Three strategies. One common theme. Activity happens in the gold market. The protocol captures activities like trading fees, lending spreads, and perpetual funds, and then generates yields. 

Once the term ends, the protocol deposits the user’s principal and yields directly to their wallets. No waiting for claiming, as AurumFi has removed the need for manual claiming altogether.

An Insight Into Placement Terms and Product Structure

At the time of writing, the official website has shown 4 launch windows.

• 1 day: The single day window is suitable for those wanting quick capital rotation.
• 7 days: The single week fixed window offers a balanced yield profile, the weekly.
• 14 days: The two-week fixed term window is a mid-term option with high returns.
• 28 days: The 28-day window helps build the strongest yield profile.

The rule is simple. The size of the APR users receive is proportional to the length of time they commit their USDT.

Since the protocol is fully on-chain, there are no central intermediaries. By extension, there is no risk of data being exposed.

Tokenized Gold as Infrastructure

AurumFi’s launch shows that a new trend is emerging in the DeFi sector: tokenizing real-world assets that offer real financial infrastructure.

Both PAXG (Paxos Gold) and XAUT (Tether Gold) are backed 1:1 by physical gold that is stored in London vaults. As a real-world asset is backing these assets, they are often considered safer options as compared to treasury-backed picks.

Central banks understand it well, as since 2022, most are amassing gold. Countries like Dubai added PAXG to their derivatives platform, while XAUT started making waves in South Korea and Switzerland.

It is clear that the demand for tokenized gold is rising. AurumFi is a project that stands at the center of it all, helping users capitalize on the new surge.

Referral Engine

AurumFi offers users a 12-level referral program.

Commission is provided at each level. At level 1, users get a 15% reward. The reward rate decreases with each level, ending at 1% at level 12.

AurumFi considers Referral Engine a standalone feature. While it is a marketing vehicle, it’s also a potential growth driver of RWA assets.

Start Using AurumFi With These 5 Steps

1. The first step is to visit the official AurumFi website and click the Connect Wallet button at the top-right of the screen. The more visible Launch App button does the same job.
2. Next, users must choose between four fixed terms for which they want to deposit their USDT inside the protocol.
3. AurumFi will prompt users to deposit USDT afterwards. No minimum amount has been mentioned on the website.
4. AurumFi then pushes the capital across the three strategies. Since it collects yields automatically, users don’t need to monitor their funds.
5. Protocol transfers the yield once the fixed term window closes.

AurumFi’s Unique Approach to Fast-Track RWA Acceptance

Players like BlackRock and Ondo Finance currently dominate the RWA game. But since tokenized treasury products are their main focus, users are exposed to dollar-denominated debt.

Gold-based structured yield hasn’t been explored yet. It is an untapped market that AurumFi has started to take seriously.

Tokenized gold doesn’t rely on broader market movements. Stability is its promise. User participation is its focus. AurumFi has thus become the tool to leverage it. It focuses on market activity, not price direction, which automatically makes it a much more suitable option.

Additional details, documentation, and direct access to the protocol are available at aurumfi.io.