Nuclear energy is back in fashion, and a new blockchain-based marketplace is looking to capitalize on the trend of offering retail investors access to investments in the yellow ore in a tokenized form.
London-based Tezos ecosystem development company Trilitech on Tuesday launched Uranium.io to offer tokens backed by physical uranium oxide U3O8, also known as ‘Yellowcake’. The app is built on Etherlink, an EVM-compatible Layer-2 network on top of Tezos. (XTZ). The project recruited British-regulated digital asset firm Archax as custodian for the underlying assets and created the tokens. The physical metal is stored and maintained in a regulated warehouse at Cameco, one of the world’s largest uranium producers.
Tokenized real-world assets are a fast-growing corner of the crypto markets, with crypto companies and global financial institutions bringing traditional investments such as commodities to blockchain rails. They do this for cheaper transaction fees, faster settlements and to reach a broader investor base. The digital tokens represent ownership of the underlying asset. For example, earlier this year, global bank HSBC introduced tokenized gold to private investors in Hong Kong.
Uranium is a crucial metal for energy production, fueling nuclear power plants with increasing demand. However, the uranium market is fragmented, with trading concentrated on over-the-counter desks and retailers’ ability to invest in the metal limited, Arthur Breitman, director of TriliTech and co-founder of the Tezos blockchain, told CoinDesk . in an interview. Moving ownership representation to blockchain rails reduces friction and makes it easier for average investors to participate, he added.
“This is especially exciting because nuclear energy is experiencing a resurgence,” Breitman said.
However, it is not the first attempt to put trade with yellow ore on blockchain rails. Last year, a project called Uranium3o8 launched a uranium-pegged token on the decentralized crypto exchange Uniswap, backed by a forward sale agreement with a mining company. However, the token decoupled from physical uranium prices and eventually dropped to near zero a few months after launch, CoinGecko data shows, underscoring the difficulties of creating a tokenization structure that works.
To ensure the token’s value is anchored to the physical metal, Uranium.io has collected approximately 1.6 million ounces of uranium oxide from Cameco, Breitman said. Meanwhile, commodity trading company Curzon Uranium is also providing access to primary markets for the ore.