Recently, one of the biggest events in the financial markets involved the settling of a huge score between Wall Street giants and Redditors. It began with a stock called GameStop, where the Reddit community came together to bet against the institutions by coordinating a massive short squeeze on the popular trading platform called Robinhood. They succeeded in breaking the price barrier, boosting the GME share price from $20 up to $350 over the course of just 2 weeks. This left hedge funds sweating over their leveraged short positions.
Although Robinhood controversially decided to step in to halt trading, a movement had already been sparked. For the first time, small investors were able to take a stance by working together. Soon thereafter, Redditors set their sights on arguably one of the most manipulated markets, silver, in an attempt to pull off the biggest short squeeze in history. The price of silver reached an 8-year high of over $30 per ounce but soon retreated as the suppressive forces overruled.
This whole debacle exposed several flaws in financial markets, particularly in relation to silver. The problem with the silver market is that it is largely made up of paper-based assets, like ETFs, which are mostly denominated in physical silver but aren’t actually representative of full ownership of the physical metal. Although redeemable under certain circumstances, the issue investors have with instruments like ‘paper silver’ is the extraordinary imbalance of the collateral relative to the issued contracts, as they are not fully backed.
Therefore, if all ETF holders were to request a physical redemption at the same time, the exchange wouldn’t be able to pay all investors in physical silver, and may be forced to cash settle some of its commitments, if at all.
Tokenization is not a new idea in the digital world, as several solutions already exist in this sphere. Aurus enters the market as a new player striving to create a decentralized system for tokenizing assets such as gold and other precious metals. The platform allows reputable industry players including refineries and brokers to independently mint their own tokens, backed 1:1 with physically allocated gold or silver. In tokenized form, metals allow for much more efficient undertakings in the market, such as direct ownership and instant settlement.
Aurus distinguishes itself by joining gold & silver providers, vaults, and distributors under one ecosystem to establish a decentralized network of trust. Industry players are encouraged to participate by receiving a portion of the revenues generated within the ecosystem. Aurus aims to modernize so-called ‘paper-assets’ by providing users access to actual ownership of the underlying assets, for example, where each AurusGOLD (AWG) token represents ownership of one gram of gold sourced from LBMA-accredited refineries.
Considering the nature of demand for precious metals, it is common for the physical markets to dry up in times of turmoil. In turn, the paper-based commodity markets are ruling the space, creating a huge disadvantage to retail investors. Aurus hopes to offer investors a reliable alternative through a transparent platform that is immune to control or manipulation by a centralized government, thereby adhering to the decentralized nature of blockchain technology.
The platform’s second objective is to increase the liquidity and stability of the precious metals market. The Aurus platform’s tokens, stand as a hedge against volatility whilst facilitating instantaneous transactions on a global scale. Furthermore, it aims to eliminate barriers in payment systems bringing cheap, speedy, and cross-border payment solutions.
To expand its reach, Aurus has its focus on Europe, Africa, South America and the Middle East, whilst planning for later expansions to other regions too.
For Aurus to deliver on its promise to users, it has developed various products and services that help to facilitate and simplify the usability and exchange of the tokens within the ecosystem.
First is the AurusGOLD (AWG) token, an ERC-20 token that is divisible into 18 decimal places to enable transactions as small as a cup of coffee. It includes all of the proven benefits of gold as a stable store of value, and combines this with the transactional efficiencies and security of cryptocurrencies. To ensure a high level of trust is achieved throughout the network, Aurus employs a smart contract that conducts regular audits on the gold supplies supported by an ERC-721 token to accurately track the gold inventories vaulted around the world.
Second is the AurusDeFi (AWX) token, a revenue sharing token that allows participants to invest in the success of the overall Aurus network. AWX has a limited supply of only 30,000,000 tokens. AWX holders receive a portion of the vaulting and transaction fees generated from all the tokens in the ecosystem, while the remaining revenue is divided equally between providers and vaulting partners. This creates a great long-term revenue stream for AWX holders, regardless of market conditions.
Last but not least is the AurusGOLD card and the Aurus App. The card is a cold wallet that allows participants to safely store and transfer their Aurus tokens. It is linked to the Aurus App to present a straightforward and safe way to interact with their tokens. Aurus is currently developing the ability for users to easily accumulate Aurus’ tokens directly in-app and linked to a variety of currency pairs.
The recent Reddit-Wall Street furore presented a unique opportunity for Aurus to provide new and existing silver enthusiasts with a more reliable alternative, with the launch of their new offering AurusSILVER (AWS).
As such, Aurus targets easy access to direct silver ownership without the manipulation of paper markets, which currently overshadow the precious metals market. One AWS token represents 1 gram of LBMA-accredited silver. Aurus also plans to present a new fee system to support its current move into silver. Now, all AWX holders will not only earn from the AWG network, but will also earn from the fees accumulated from AWS transactions too.
The platform is also working towards listing AWS on WhiteBit and its new exchange, CEX.io in the near future. The token will also be directly linked to the Aurus App to facilitate instantaneous and fluid transactions of silver globally.
If we zoom out for a moment and look at things from a global macro perspective — the pandemic has severely affected growth in all markets, the trillions that have been printed as a result by Central Banks around the world, record low-to-negative interest rates and the ever-increasing risk of inflation, are all realities that face investors. With that said, the demand for alternative stores of value, like Gold, Silver and other precious metals will inevitably increase, and most likely at a more rapid pace than anyone will expect.
Aurus has a revolutionary approach to solving the problems affecting the precious metals market today. Furthermore, the platform is working towards a free and fair ecosystem that will enable an equal chance for all interested parties, regardless how big or small, to invest and transact in precious metals and ultimately protect the value of their investments and savings, both now and in the future.
Aurus shows that asset tokenization is the next big trend to break down the barriers present in most economies through its various tokenization services. The Aurus ecosystem promises that this is just the beginning in its quest to transform this space entirely.
Who knows what the future holds, however, based on current developments, it is not so difficult to envision the introduction of AurusPLATINUM and other alternative investment solutions in the coming months..