The XAUE protocol lets holders earn yield on tokenized gold through lending and trading strategies while maintaining exposure to the underlying asset.
The XAUE protocol lets holders earn yield on tokenized gold through lending and trading strategies while maintaining exposure to the underlying asset. Aurelion, a Nasdaq-listed company building a Tether Gold-backed treasury, has allocated 10,000 units of the token, worth about $48 million, to a newly launched protocol designed to generate yield on tokenized gold.
The DeFi protocol, XAUE, was introduced earlier this week by the Aurise Foundation as a treasury layer for Tether Gold, allowing tokenized gold to be used in yield-generating strategies while maintaining exposure to the underlying asset. Aurelion is the rebranded form of wealth and asset manager Prestige Wealth and is positioning Tether Gold as a primary reserve asset.
In October 2025, the company raised $150 million in financing, including a $100 million private investment in public equity and a $50 million debt facility, to support the strategy. According to the Aurise Foundation’s initial announcement on Wednesday, Antalpha, a digital asset financial services company, was also among ecosystem partners that committed a combined 16,052 XAUT, or around $76 million, to seed the protocol.
XAUE generates yield through strategies such as institutional lending and quantitative trading, with returns reflected in an increase in the gold backing per token rather than being distributed separately. The protocol operates on Ethereum and uses a fixed-supply model, in which deposited XAUT is converted into XAUE at a 1,000:1 ratio. Under this structure, reserves may grow over time as yield accrues while token supply remains unchanged. Users can redeem XAUE for the underlying gold-backed tokens.
Access is limited to whitelisted, KYC/KYB-verified institutional participants in eligible jurisdictions, the foundation said. Aurelion said it will hold a total of 33,318 units of Tether Gold following the allocation, including 10,000 units deployed to XAUE and 23,318 units held outside the protocol. Gold has traditionally been considered a non-yielding asset, offering price exposure without generating income.
But tokenization, the process of representing real-world assets like gold on blockchain networks, is beginning to introduce new structures that enable yield while maintaining exposure to the underlying commodity.backing its gold-linked stablecoin thUSD, using deposited funds to purchase tokenized gold while simultaneously shorting gold futures to hedge price exposure.that puts user deposits into short-duration physical gold trades, aiming to generate returns from price discrepancies rather than long-term exposure to bullion.from RWA.xyz shows the sector at roughly $5.25 billion, with Tether Gold and Paxos Gold accounting for the majority of the market.
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