Summary
Objective Labs recommends listing XAUt (Tether Gold) on Euler Prime as a collateral-only asset for stablecoins. This integration introduces a non-USD stable, commodity-backed token to the protocol, broadening collateral diversification beyond fiat-based and crypto-native assets.
Fundamentals
XAUt is a gold-backed token issued by Tether, each representing one troy ounce of physical gold stored in Swiss vaults. Ownership of each token corresponds to specific allocated gold bars, verifiable via Tether’s platform. Tether Gold token is currently available as an ERC-20 token on the Ethereum blockchain.
XAUt tracks the spot price of gold and is commonly used by crypto users seeking exposure to real-world assets or hedging against volatility in stablecoins or broader crypto markets. It combines the stability of traditional commodities with the composability of DeFi, making it a natural fit for collateral use in lending protocols like Euler.
Liquidity
XAUt is a widely used tokenized gold product with sufficient onchain depth for collateral use. Liquidity depth simulations against USDC show that 696 XAUt can be swapped at 5% slippage and 789 XAUt can be swapped at 15% slippage.
Risk Parameters
We recommend that XAUt is onboarded as a collateral-only vault for stablecoin vaults only in Euler Prime.
Caps
| Asset | Supply Cap | Borrow Cap |
|---|---|---|
| XAUt | 200 | - |
We recommend initial conservative caps of 200 XAUt supply, reflecting current liquidity while allowing sufficient room for adoption and market discovery.
IRMs
No IRM is needed as XAUt is non-borrowable.
LTVs
| Collateral | Debt | LLTV |
|---|---|---|
| XAUt | USDC, USDT, RLUSD, USDS, USDtb | 75% |
| XAUt | USDe | 73% |
We recommend setting borrow LTVs to 2% below LLTVs.
Oracle
We recommend using the Chainlink XAU/USD price feed, which reflects institutional gold pricing. Since traditional gold markets do not operate 24/7, this fundamental feed remains static during market closures (e.g., weekends), helping reduce unnecessary volatility in collateral valuations. This approach aligns with how other non-24/7 assets are handled on-chain.