Tokenized gold passes DeFi stress test, but less than 2% is used as collateral
Summary
Demand for tokenized gold has surged alongside record bullion prices, with first-quarter spot trading volume reaching $90.7 billion. But DeFi usage remains small: only about $63 million of Tether Gold (XAUT) and PAX Gold (PAXG) is posted as collateral on Aave v3 and Morpho, or roughly 1.5% of their $4.2 billion combined market cap. Tokenized gold has also shown resilience under stress. During a sharp March sell-off in gold, Aave handled its largest XAUT liquidation cluster without disruption, suggesting tokenized bullion can work reliably as DeFi collateral. The main challenge is adoption, not performance. Tokenized gold is part of a fast-growing tokenized real-world asset market, but most value remains unused in lending protocols.
