Tokens are the lifeblood of decentralized finance. The gift of the blockchain is being able to atomise tiny fractions of value and stack them endlessly, like a million miniature Lego bricks, on top of one another. It gave the ability to crowdsource loans, exchange, and remittance – the very milieu of every global bank.
It erected a code architecture that allows us to broker financial arrangements that span every corner of the globe with just a few clicks. Sign a smart contract, send a transaction, and suddenly global capital just got infinitely more efficient, more effective, safer, and faster.
How DeFi Made Crypto Grow Up
DeFi, the Ethereum use case that launched a fleet of a thousand protocols, was the innovation that made crypto grow up. That turned magic internet money into magic internet FINANCE. Suddenly, disparate actors could engage in trustless smart contracts with no central authority that brokers complex deals, without anyone giving them permission.
Tens of thousands of people could, collectively, come to the house, and begin issuing savings and loan packages to anyone else. Microfinance for the unbanked became a real possibility, at last, in areas where the world’s banking infrastructure fails or is simply too expensive. Crypto now had a use case, and it was compelling.
Millions, nay, billions, poured in, despite the nominal tech on offer at the time. A lot of people made staggering sums, and still do, operating yield farms. Providing liquidity to bootstrap protocols, earning a yield and, then placing the given brick in yet another protocol, powering up loans whose yield could be further stacked.
Decentralized exchange finally allowed for trading without using a centralized authority or market maker. Insurance could be arranged, synthetic assets minted. Everything free and flowing under the auspices of the trustless and unimpeachable blockchain, with full accountability along the way.
Finally, humanity has a real, workable decentralized finance model that could, in theory, replace the world’s banks or, at the very least, provide a compelling alternative.
DeFi Still Just Getting Started
Yet DeFi’s true potential is not yet fully unlocked. Stable currencies are still locked to fiat. Undercollateralized loans are still a long way off. Insurance is limited to on-chain activity. Synthetic assets are nascent. And prediction markets are – well – everyone knows what they are; but at least the bookies in this case everyone else, and at least you’re guaranteed a payout.
As we onramp the world’s banking system onto the blockchain, the need for a truly stable asset to underpin it becomes ever more apparent. And gold will be that asset, just as it is in the real world, second only to the US dollar with its current reserve currency status. And USD has extremely inflationary tokenomics.
How Tokenized Gold Can Make DeFi Work
Tokenized gold inherits all of gold’s fantastic legacy properties: its value as an intermediary currency in global trade. Its use as a hedge against inflation. Its widespread eternal acceptance as a method of payment. Its continued use in decorations and electronics. Its collectibility. Tokenized gold then adds plenty more.
Minting a token which is 100% backed by gold and unimpeachable as the blockchain it exists on, as with Kinka Gold, provides a sure footing on which DeFi can thrive. Gold’s price is stable, steadily gaining over 50 years as fiat inflates with the population. Who wouldn’t accept collateral for a loan in gold?
Every $XNK token is equivalent to one fine troy ounce of redeemable gold held in bankrupt-remote vaults. $KNK is issued by a subsidiary of UNBANKED, INC., and the gold bullion that backs it is designated as a clearing stock in the gold futures market of the Osaka Exchange, which is managed by the Financial Services Agency of Japan. Each $XNK is worth its weight in gold.
Why Tokenized Gold Will Power Up DeFi
The ability to atomise gold into tiny fragments in a way that would be impossible with gold bars, jewelry or even paper-gold instruments that represents banking reserves, allows the massive amount of pent-up liquidity stored in gold reserves the world over to flow through the decentralized finance markets.
Gold is, still, relatively expensive to trade – with bespoke access and large volumes needed to make it profitable, making it the reserve of large banking institutions. Yet with tokenized gold, that stored liquidity can flow into the novel financial structures created everyday by coders fighting for a new, code-based financial order – one that’s equitable, and accessible, to everyone.
$XNK will boost gold ownership and make it attractive, and open, to anyone. Whereas previously management fees or storage fees or risk profiles would block access to any small time investor – at least profitable access – $XNK will let any bedroom trader or rainy day saver get easy access and exposure to the safe and secure haven that is gold. There are many goldbugs in the woodwork, $XNK will give them something to gnaw on.
It’ll also give others something to trade with in DeFi. Certain jurisdictions, including Japan, do not recognize the legitimacy of USD-backed or fiat-currency backed stablecoins. Crypto traders in Japan must bear at times punishing risks when looking to trade crypto, with their exposure to risky assets and lack of intermediary safe havens a problem.
Gold-backed crypto, which is regulated by the FSA, is approved, and $XNK is compliant with all local Japanese regulations. So, in jurisdictions in Japan and others where fiat-currency stablecoins are not recognized, gold is a powerful antidote, and tokenized gold way to lubricate the wheels of DeFi in these countries while lowering the risk profile significantly for the participants.
Kinka Gold – The Solution to Golden DeFi
Kinka Gold aims to be the world’s local currency. Backed 100% by only the finest premium Japanese gold, $XNK is a way to power up DeFi globally, creating the necessary linchpin collateral and currency that lets DeFi thrive, giving gold its seat at its ancient throne, the prime token on which the world’s money systems run.