The tokenized commodities market reached $5.55 billion in market capitalization at the end of March 2026, up from $1.43 billion at the beginning of 2025, with gold-backed tokens from Paxos and Tether accounting for almost 90% of that growth, according to CoinGecko data. Executives at Paxos Labs, Theo and Energy Substantiation now expect the sector's next phase to come from putting physical assets to work — lending gold and silver, and tokenizing crude oil — rather than simply tracking commodity prices on blockchains.

The thesis is straightforward: tokenization should connect investors seeking exposure and income with businesses that need inventory financing, opening markets traditionally reserved for large institutions.

Can gold lending become the next growth engine?

Paxos Labs is betting that it can. Its PAXGy token is backed by PAX Gold, with reserves deployed to institutional borrowers. Each token is designed to become redeemable for more PAXG as underlying lending rates are paid back in ounce terms, allowing holders to accumulate more gold while retaining price exposure.

"The big proposition is access," Paxos Labs co-founder Bhau Kotecha told CoinDesk. Gold lending, he said, has historically required scale and relationships unavailable to most investors. Kotecha sees demand from individuals, family offices and institutions, with borrowing against PAXGy a possible next step. The risks are structural: lending returns are not guaranteed, and borrower defaults could erode the token's value.

Silver offers a parallel route. 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 expects growth from institutions seeking productive collateral, refiners financing inventory and corporate treasuries wanting assets that settle quickly.

Silver is "the natural second" after gold, Ioppe said, citing industrial demand and an established leasing market — though greater volatility and a tighter supply of available metal complicate the opportunity. He forecasts a tokenized commodities market worth tens of billions of dollars within five years and more than $100 billion within a decade, with tokenization becoming part of ordinary commodity settlement and financing within 15 years.

Why is oil a harder test than metals?

Energy Substantiation (EnSub) is pressing ahead regardless. On Oct. 2 the company expanded its WTIC token from Ethereum to Solana, with each token representing one barrel of West Texas Intermediate crude backed by verified physical inventory, according to its announcement.

Co-founder and CEO JP Thieriot said natural gas and Brent tokens are under development. He expects demand from energy buyers hedging costs, investors seeking exposure and suppliers needing working capital, and predicts oil tokens could account for a quarter of the oil market within 10 years.

The executives diverge on how quickly energy can follow metals. 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 essential for commodities continuously in motion.

Custody, logistics and borrower risk remain the sector's principal hurdles. Expansion will depend on connecting tokens to reliable physical markets and giving asset owners a compelling reason to use them. If the executives' timelines hold, the second half of the decade — with EnSub's gas and Brent launches and Paxos Labs' PAXGy scaling — will determine whether tokenized commodities remain a gold story or become a broader financing infrastructure.