As digital assets evolve, we begin to see more Real-World value that is brought to chains, literally literally.
One of the most interesting developments is Xaut0, a new version of Tether Gold that is designed to work in multiple block chains. Built on Layerzero’s OFT standard, users can move with gold-supported tokens between networks without trusting risky bridges or packaged tokens.
In this Q&A, Lorenzo R, co-founder of USDT0, us through how it all works and why this is such a big problem for the future of crypto and raw materials. Lorenzo breaks down what “Omnichain” really means in simple terms, explains how gold possession behind the scenes is structured and shares why they were first launched on the Ton network of Telegram.
He also touches on the wider vision: people give easier access to real, interchangeable assets such as gold, without the headache of traditional finances.
Below is the full Q&A with Lorenzo R.
Crypto.news: Xaut (Tether Gold) has been live since 2020 as a sign on Ethereum. What are the most important technical and strategic improvements in Xaut0, in addition to switching on cross-chain transfers, compared to the original Xaut?
Lorenzo R: With USDT0 we have now extended Tether to 11 more chains and we will continue to do this on a scale. USDT0 is the missing link to the continuous expansion of Tether, Xaut0 is the next step of USDT0 in development. USDT0 acts as the connective tissue with which Tether’s ecosystems can thrive in the contemporary multi-chain world. Xaut only lives on Ethereum MAINNET and XAUT0 is used to actively expand this over chains. No liquidity fragmentation and no need for a legacy mesh solution, because we are those who are actively expanding over chains.
The most important improvement of Xaut0 remains its cross -chain, the “token” side of the system works exactly the same as all other ERC20 tokens. We don’t think the wheel again, we just make it more accessible for users and act as the most important expansion and interoperability solution for Xaut.
CN: Each Xaut0 token represents the ownership of one fine Troy ounce of LBMA standards of gold in a Swiss safe. How is this property claim legally structured? Who has the legal title that gold, and under which jurisdiction or legal framework can a token holder claim? How does the redemption process work?
LR: From a legal point of view, every Xaut token is only an Iou supported by physical gold held by TG raw materials SA The CV in Switzerland-TG raw materials has the title to the bars and the right to that gold comes from a contract with Tethergoud under Swiss storage rules. If you ever want to claim your ounce, you only verify your account with TG raw materials and ask for a refund; The Swiss law (and the own conditions of Tether) regulate how to prove your right and send the metal.
What we do is getting users on different block chains access to this system, but the underlying asset remains Xaut. If a user wanted to exchange his Xaut0 tokens, they would first send them back to Ethereum, receive their corresponding amount of Xaut and then continue the process above with TG Commodities SA
CN: Xaut0 offers “Direct ownership of gold, not only price basting” in contrast to ETFs or synthetic tokens. Can you clarify this distinction? How does keeping Xaut0 in practical terms differ from holding a share of a Gold ETF (eg $ gld) or a token supported by crypto such as PAXG in terms of legal rights, audits and risk of loss?
LR: Xaut0 tokens binds directly to Xaut Tokens locked up on Ethereum, which are then bound by a specific ounce of LBMA standards of gold in a Swiss safe, and you can take that exact beam as soon as you verify your account with TG raw materials.
For audits, the reserves of Xaut0 are followed on the chain and are auditable by everyone. For every Xaut0 in circulation, one Xaut supports it on Ethereum. Those Xaut tokens are then checked by TG raw materials. Xaut0 is a way to give access to Xaut tokens to a wider audience on their favorite block chains, I would pass you on to the Tether Gold team for every legal/compliance question.
CN: I have seen cases of Xaut0 described as a “stablecoin”, although it is linked to gold. How do you classify Xaut0 from a regulation perspective: are you a commodity token, a security or a specialized stablecoin? Which financial regulations (eg SEC, CFTC, Swiss/French gold laws) apply to Xaut0?
LR: We see Xaut0 as a modern, unchain alternative for storing value in the global economic uncertainty that combines the scarcity and inflation power of physical gold with accessibility USDT0. Xaut0 is a stablecoin, it is simply expressed in our gold instead of in USD. In terms of regulations, Xaut0 is no other token, only the display of Xaut to another chain compared to Ethereum. You can imagine this system in the same way as you see other Omnichain representations of certain assets.
CN: Have the Xaut0 Smart contracts and Layerzero integrations checked by security companies, and what protections are there against protocol or contract exploits?
LR: Layerzero Protocol is specifically designed with multiple Fail-Safes for potential USDT0 solvency risks, both of which must be violated for a solution issue: double DVN verification and Layerzero end point validation. If Layerzero experiences a failure, because USDT0 has a non-recurring design that minimizes external dependencies, the reserves of USDT0 remain fully intact and secured on Ethereum. The architecture of the token ensures that no mining or repayment can occur without verified, validated communication. For more information you can visit the Chaos Labs report from USDT0, which has recognized USDT0 ‘as a breakthrough in Stablecoin infrastructure and it assesses as economically safe with a minimum risk exposure.’ You can read more here.
Although it is built on the already tested standard of the battle, each USDT0 or Xaut0 contract has been checked, verified and we retain the 5th largest bug -bounty in the world, which can be found here. The complete security audits for our token contracts can be found here.
CN: The first deployment of Xaut0 is on Ton via the wallet of Telegram. Why was Ton chosen as a launch platform instead of existing Defi chains? What are the benefits and risks to anchor a gold smack in the telegram/tonne ecosystem?
LR: Choosing Ton as the first bet of Xaut0 was a natural fit. Our teams have a long -term relationship and their dedication to permissionless innovation fits in closely with ours. This rollout reflects our shared vision: programmable, physically supported assets such as gold to be used as accessible and seamlessly as any native digital token. You will soon see more and more chains join the Xaut0 network, with some of them mainly focused on the Defi aspect.
CN: You have said that Xaut0 brings a “timeless property to the decentralized ecosystem”. Looking ahead, are you planning to spend other Omnichain tokens for raw materials or assets, in particular oil and silver? What is your wider vision of Tokenized raw materials in Defi?
LR: From now on USDT0 is evaluating new chain implementations via three core pillars, including: user involvement and ecosystem demand, chains that offer something different and unique for the ecosystem, and the potential for growth and long-term value for the tether ecosystem.
Ultimately, we focus on bringing tether assets to chains that offer the most potential for growth – users, volume and use cases.