Theo launches yield-bearing tokenized gold built to 'work in DeFi'

Theo has launched a new tokenized gold product designed to generate yield, a feature that has largely been missing from the growing onchain bullion market, through a partnership with Libeara, a tokenization firm backed by Standard Chartered’s venture arm.

The product, called thGOLD, offers exposure to spot gold prices while earning yield from secured lending tied to physical bullion inventories.

It is built on FundBridge Capital’s MG999 On-Chain Gold Fund, which lends against gold pledged by established retailers, starting with Singapore-based Mustafa Gold. Borrowers use their inventory as collateral in exchange for liquidity, allowing the fund to collect interest while maintaining exposure to gold prices.

Theo said thGOLD will be made available across several decentralized finance venues, including Hyperliquid, Uniswap, Morpho, and Pendle, where it can trade and be used as collateral.

Gold fever

The launch comes as interest in tokenized gold accelerates alongside bullion’s massive rally.

Gold prices hit a fresh all-time high of over $5,100 on Monday, extending gains driven by central bank buying, easing interest-rate expectations, and persistent geopolitical uncertainty.

Tokenized gold products now account for a record $5.12 billion in market capitalization, according to The Block’s data.

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Most existing gold-backed tokens, including market leaders Tether XAUT and Paxos PAXG, provide spot exposure but no native yield, limiting their use beyond price tracking. Introducing yield has historically been constrained by the operational and counterparty risks involved in lending against physical metal.

Theo co-founder TK Kwon said the goal was to make gold functional within decentralized markets rather than simply mirroring its price onchain.

"Most tokenized gold today is just a wrapper," Kwon said. "We built thGOLD to actually work in DeFi — it earns yield, trades on real venues and can be used as collateral."