Paxos Labs and Theo bet tokenized commodities can do more than sit there
New yield-bearing gold and silver tokens aim to turn idle metal into a productive asset as the sector tops $5 billion
For most of its short life, tokenized gold has done one job: track the price of gold. Paxos Labs and Theo want it to earn its keep.
Both firms are pushing yield-bearing commodity tokens into a market that research puts at more than $5 billion.
From shiny rock to income stream
Paxos Labs launched PAXGy on September 24, 2026. The token is backed by PAXG, the firm’s existing tokenized gold product, and taps institutional gold leasing to build up additional gold reserves over time.
Theo got there earlier. The firm introduced thGOLD in January 2026, a product that yields approximately 2% from gold lending.
Theo then widened its scope in September 2026. It rolled out tokenized silver backed by $40 million in active leases, extending the lending model it had already applied to gold.
The numbers behind the push
Tokenized gold trading volume hit $90.7 billion in Q1 2026. That single quarter exceeded the total for all of 2025.
As of October 2026, more than 450,000 wallets hold tokenized commodities, a figure that has climbed year over year.
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Tokenized gold remains the dominant force in the space. PAXG and XAUT lead the segment, and the sector’s overall value has passed the $5 billion mark, with some estimates placing it in the $5 to $6 billion range.
Paxos Labs estimates that roughly $530 billion in gold is held in traditional ETFs that earn no yield.
Why yield changes the conversation
Spot-price tokens solved an access problem. They let people own gold on a blockchain, move it around the clock, and skip the hassle of storing physical bullion.
Products like PAXGy and thGOLD emphasize DeFi composability, institutional-grade custody, and a path into traditional lending markets.
Composability means a token can plug into other on-chain applications, serving as collateral or liquidity elsewhere while still earning its base yield. A gold token that earns lease income can also back a loan in a lending protocol — something a conventional gold ETF share cannot easily offer.
What this means for the market
Gold leasing has traditionally been a business for institutional players, and wrapping it in a token could bring that yield to a far wider audience, from retail holders to funds already active on-chain.
Paxos has the advantage of building PAXGy directly on its established PAXG base, while Theo has a head start of several months and a broader multi-metal lineup.
Any yield from leasing depends on borrowers honoring their obligations, so returns come with counterparty exposure that plain spot tokens do not carry.