One basket. Multiple metals. A new way to think about exposure.
Multi-metal token baskets could become the digital version of a metals ETF—combining gold, silver, and industrial metals into a single, tokenized instrument.
Simple on the surface. Complex underneath.
They promise:
Diversification
Transparency
Global access
But they also raise important questions:
Who holds the metal? Where is it stored? What happens under stress?
Tokenization doesn’t eliminate these issues—it reveals them.
The future of metals may not be just about what you hold… But how it’s structured.
Are Industrial Metals Ready to Join the Blockchain World
The conversation around tokenization has, to date, been dominated by precious metals—particularly gold and, to a lesser extent, silver. That focus has been logical. Gold is a store of value, widely recognized, and relatively standardized. Silver, too, has been a store of value for thousands of years and remains so in many parts of the world. Hence, both lend themselves naturally to tokenization. But a quieter shift is now beginning to take shape.
Industrial metals—long defined by their role in production rather than wealth preservation—are starting to enter the blockchain conversation. This development raises an important question: can metals defined by utility, variability, and complex supply chains be effectively tokenized? Or does their very nature resist the structure required for digital representation? Read along to find out, but first we start with a definition: what are industrial metals?
What Are “Industrial Metals”?
Industrial metals are those primarily used in manufacturing, construction, and technology rather than as stores of value, a unit of account, or a medium of exchange. In other words, industrial metals are not money nor currency. While industrial metals don’t function as money, they are the backbone of the real economy. No industrial metals equals no modern society. Consider these common examples:
• Copper Aluminum
• Nickel Zinc
• Lead Tin
What do they all have in common? These metals are essential inputs for:
• Infrastructure and construction
• Energy systems (including renewables)
• Electronics and manufacturing
• Transportation and industrial machinery
Unlike gold or silver, their value is not driven by monetary psychology; it is driven by economic activity and industrial demand.
Why Industrial Metals Are Now Entering the Tokenization Conversation
Three structural shifts are driving interest in tokenizing industrial metals. Let’s examine each one below.
1. Supply Chain Complexity
Industrial metals move through long, fragmented supply chains:
• Extraction
• Refining
• Transportation
• Storage
• Delivery
Each stage introduces friction, opacity, and inefficiency. Tokenization offers the potential to:
• Track ownership more precisely
• Improve transparency
• Reduce settlement delays
In theory, a token could represent a specific quantity of metal at a defined point in the supply chain—creating a more efficient system of transfer and verification. Now, point two.
2. Demand for Transparency and Provenance
As global supply chains come under scrutiny—particularly around environmental and geopolitical issues—there is growing demand for:
• Verified sourcing
• ESG compliance
• Chain-of-custody tracking
Blockchain infrastructure is well-suited to this challenge. Tokenized metals are capable of:
• Recording origin
• Tracking movement
• Providing immutable audit trails
This is particularly relevant for metals used in:
• Electric vehicles
• Renewable energy systems
• Advanced manufacturing
3. Financialization of Commodities
Industrial metals are already heavily traded. Traders often use:
• Spot markets
• Futures contracts
• Exchange-traded products
Tokenization represents a potential next step in the technological evolution—bringing:
• Faster settlement
• Fractional access
• New liquidity channels
However, unlike gold, industrial metals are not typically held for investment. That distinction matters.
How Industrial Metals Might Be Tokenized
We now turn to the “how” in the process. The tokenization of industrial metals can take several forms, each with different implications. Let’s walk through the possibilities.
1. Warehouse-Backed Tokens
The most straightforward model mirrors tokenized gold:
• A token represents a specific quantity of metal
• Stored in a certified warehouse
• Backed by documented inventory
This approach works best when:
• The metal is standardized
• Storage conditions are stable
• Inventory is clearly defined
2. Supply Chain Tokens
A more complex model involves tokenizing metals in motion. This model is much more ambitious—not impossible, just more difficult. If successful, it might look like this:
• Representing metal at various stages (ore, refined, shipped)
• Linking tokens to logistics data
• Updating ownership as the metal moves
3. Production-Linked Tokens
In some cases, tokens could represent:
• Future production
• Offtake agreements
• Rights to delivery
This begins to blur the line between commodities and financial contracts. This, of course, introduces additional layers of risk—a field day for securities lawyers.
Which Industrial Metals Are Strong Candidates?
Not all industrial metals are equally suited for tokenization. Below, they are divided into most viable, moderately viable, and less viable categories based on market structure, standardization, and practical considerations.
Most Viable Candidates
Copper
• Highly standardized
• Globally traded
• Critical for electrification and energy systems
Strong candidate due to liquidity and uniformity
Aluminum
• Widely used
• Standardized forms (ingots, billets)
• Established global markets
Suitable for warehouse-backed token models
Nickel
• Increasing demand (EV batteries)
• Growing interest in supply chain transparency
Viable, particularly with ESG tracking
Moderately Viable
Zinc and Tin
• Smaller markets
• Less investor attention
• Still standardized
Possible, but with limited initial demand
Which Metals Are Less Viable—and Why
Lead
• Declining industrial relevance
• Environmental concerns
Limited investor and institutional interest
Highly Specialized Alloys
• Non-standardized
• Variable composition
• Difficult to verify consistently
Poor candidates for tokenization
Raw Ore
• Highly variable
• Quality differences
• Requires processing
Not suitable for direct token representation
The Core Challenge: Standardization vs. Reality
The central issue with industrial metals is not technology—it is standardization. Without standardization, it becomes an uphill climb.
Gold works because:
• One ounce is interchangeable with another
• Quality is universally defined
Industrial metals, by contrast:
• Vary by grade
• Differ by form
• Depend on end-use requirements
This creates friction in token design. While tokens can be non-fungible (NFTs), that only adds complexity.
For tokenization to work, the system must answer:
• What exactly does the token represent?
• Where is the metal located?
• What are its specifications?
Without clear answers, the token risks becoming:
• Ambiguous
• Illiquid
• Distrusted
Governance Still Matters
As with precious metals, tokenization does not eliminate the need for governance—it amplifies it.
Key considerations include:
• Custody and storage verification
• Audit frequency and transparency
• Legal ownership rights
• Redemption mechanisms
In industrial metals, these issues are even more complex due to:
• Supply chain variability
• Multiple stakeholders
• Jurisdictional differences
Without strong governance frameworks, tokenized industrial metals risk becoming:
• Conceptually appealing
• Practically unreliable
So—Is This a Real Shift or Premature?
Industrial metals are unlikely to follow the same path as gold or silver. They are not primarily:
• Stores of value
• Monetary hedges
They are:
• Inputs
• Tools
• Economic enablers
That distinction means tokenization will likely develop differently. Instead of focusing on investment demand, the more appropriate focus may be efficiency, transparency, and logistics applications.
Final Thoughts
Industrial metals are beginning their blockchain moment—but it will not look like gold’s. This is not about creating digital stores of value. It is about modernizing the infrastructure that supports the real economy using blockchain technology.
The opportunity is significant:
• More transparent supply chains
• Faster and more efficient transactions
• Improved verification and trust
But the challenges are equally real:
• Lack of standardization
• Complex logistics
• Greater governance requirements
As with any emerging system, the outcome will depend not on the technology itself, but on how it is implemented. Tokenization can bring structure to complexity—but only if the underlying system is clearly defined and rigorously governed. In the case of industrial metals, that work is just beginning.
Tokenization promises a lot—speed, transparency, global access, and the ability to move physical assets at digital speed. But there’s one uncomfortable question the space doesn’t like to linger on:
Who’s on the other side of the trade?
Liquidity is not about technology. It’s about participation.
An asset can be perfectly tokenized and still be difficult to buy or sell in meaningful size without moving the price. When that happens, confidence erodes quickly—no matter how elegant the blockchain design may be.
This is especially true in tokenized metals.
Gold begins with a structural advantage: deep global markets, standardized bars, central bank participation, and centuries of trust. Silver follows, but with more volatility. Other metals—platinum, palladium, and especially rhodium—face much steeper liquidity challenges that tokenization alone cannot solve.
The hard truth is this: Tokenization digitizes access. Liquidity determines usability.
That’s where market makers, institutional participation, predictable redemption, and market structure come into play. Liquidity isn’t created by opening the doors—it’s earned through trust, depth, and consistent participation.
Technology helps. But economics still has the final say.
If you’re interested in where tokenized metals realistically stand today—and what would need to change for them to reach global volume—I explore the liquidity question in depth in my latest long-form piece. Yogi Nelson
Part of an ongoing, long-form series examining the tokenization of precious metals—one of the few sustained efforts to explore custody, liquidity, redemption, and market structure throughout 2026.
Champions of tokenization promise many things: transparency, portability, programmability, and global access to assets that once sat quietly in vaults. In the case of precious metals, tokenization holds out an especially attractive vision—gold, silver, and even more exotic metals moving at internet speed rather than banker speed. But there’s a stubborn, unglamorous problem standing in the way of those champions–liquidity.
It’s true—tokenization can digitize metal. However, it cannot, by itself, guarantee that someone is always there to buy or sell the asset.
This article explores what the liquidity problem actually is, why it matters, why some metals are more liquid than others, and therefore better candidates for tokenization, and what would need to happen for tokenized metals to approach true global volume. First, we start with the basic question, what is liquidity?
LIQUIDITY IS THE KEY!
What Do We Mean by “Liquidity,” Really?
Liquidity is one of those financial terms that everyone uses and almost no one pauses to define; let’s not be another one of those people. According to Investopedia, liquidity refers to:
“The degree to which an asset can be quickly bought or sold in the market at a price reflecting its intrinsic value.”
In plain English, liquidity answers three practical questions:
Can I sell this when I want?
Can I sell it in meaningful size?
Can I do so without materially moving the price?
Liquidity is not about whether an asset is valuable. It is about whether that value can be realized efficiently. As smart investors, we know: there is no profit until and unless the profit is realized!
Examples of highly liquid assets
Cash
U.S. Treasury bills
Major currencies (USD, EURO, JPY)
Large-cap public equities
Spot gold in standard bar form
These assets trade constantly, have many buyers and sellers, and allow large transactions with minimal price impact.
Examples of illiquid assets
Private equity stakes
Fine art
Rare collectibles
Thinly traded commodities
Certain real estate markets
Exotic metals like rhodium
These assets may be valuable, even extremely valuable—but converting them into cash can take time, negotiation, and often a price concession.
Liquidity, in short, is not a judgment about worth. It is a measure of market readiness. Period.
Why Liquidity Matters More Than Tokenization
Tokenization solves representation. Liquidity solves usability. This distinction matters more than most marketing materials admit, and for clear conflict of interest reasons!
History is full of assets that were perfectly “ownable” but practically unusable due to liquidity constraints. Below are just three examples:
privately held companies with no secondary market,
thinly traded bonds,
structured products that looked attractive on paper but could not be exited without loss.
In each case, the problem was not ownership—it was exit. Without sufficient liquidity:
prices become unreliable,
bid–ask spreads widen,
volatility increases,
and confidence erodes.
An asset that cannot be exited predictably becomes a theoretical investment, not a functional one. Tokenization does not automatically fix this. A token can make ownership easier to track, transfer, and audit—but if no one is consistently willing to trade, liquidity remains scarce.
This is why liquidity is not a secondary issue. It is the gatekeeper between innovation and adoption.
The Liquidity Problem in Tokenized Metals
As if one challenge isn’t enough, tokenized metals face a double liquidity challenge. Let’s go through those two now.
First: the underlying metal. Not all metals trade the same way. While I love them all, some are more “equal” than others. Take for example gold.
Gold enjoys:
global spot markets,
deep futures markets,
central bank participation,
standardized bars and settlement norms.
Liquidity already exists. Tokenization plugs into it. A perfect fit. What about silver?
Silver is liquid, but thinner:
more industrial demand,
more volatility,
fewer institutional holders.
Tokenization can help—but it cannot smooth silver’s inherent swings. Silver, being a dual metal, monetary and industrial, is much more volatile.
Platinum and palladium are:
industrially driven,
dependent on specific sectors,
subject to sudden demand shifts.
Liquidity exists, but it is episodic.
Rhodium is the extreme case and completely likely unsuitable for tokenization:
no meaningful futures market,
very thin spot trading,
prices that can move violently.
Tokenizing rhodium does not create liquidity. It simply makes scarcity visible in real time.
Problems Caused by Poor Liquidity
Low liquidity is not an abstract inconvenience. It creates concrete problems. Below are four problems, listed in no particular order of importance, because they are all equally critical.
1. Wide bid–ask spreads
Thin markets punish participation. Buyers pay up; sellers accept discounts. The worse of both worlds.
2. Price distortion
In illiquid markets, small trades can create misleading price signals, undermining trust. Once trust is gone, bringing it back is an uphill climb.
3. Redemption pressure
If token holders cannot sell easily, they may redeem for physical metal instead—stressing vaulting and logistics systems.
4. Institutional hesitation
Institutions care deeply about exit risk. If they cannot move size without disruption, they simply stay away.
Liquidity attracts participants. Participants create liquidity. Without the first step, the cycle never starts.
Why Gold Has a Structural Advantage
Gold begins the liquidity race several laps ahead. Its advantages are not technological; they are historical and institutional and those maybe more important at this stage:
centuries of trust,
standardized market conventions,
global clearing mechanisms,
and deep participation.
This is why tokenized gold products have a realistic path to scale. They are not inventing liquidity—they are digitizing access to existing liquidity. Silver may follow. Other metals face steeper climbs.
Can Tokenized Metals Create New Liquidity?
Sometimes—but not by access alone. Liquidity is not created by opening the doors. It is created when:
pricing is reliable,
settlement is predictable,
custody is trusted,
and exit is assured.
Liquidity is a social and institutional phenomenon, not a purely technical one.
The Role of Market Makers
What the heck is a market maker? The answer according to Investopedia is: a firm or individual that provides liquidity to a market by continuously offering to buy and sell a particular asset at publicly quoted prices, profiting from the bid–ask spread while helping ensure orderly trading. If that sounds complicated, try this definition in plain English: a market maker is the party that stands ready to buy when others want to sell—and sell when others want to buy—so markets don’t freeze up. In essence liquidity is “engineered” by professionals.
Market makers:
quote continuous buy and sell prices,
absorb short-term imbalances,
and take risk so others don’t have to.
In tokenized metals, market makers face unique challenges:
fragmented venues,
regulatory uncertainty,
redemption complexity,
and thin underlying markets for non-gold metals.
Without professional market makers, global volume remains aspirational.
Other Essential Players
No man is an island and in tokenized metals liquidity requires an entire ecosystem. The ecosystem consists of but is not limited to:
trusted custodians,
independent auditors,
compliant exchanges,
predictable settlement systems,
and regulatory clarity.
Tokenization reduces friction—but it does not replace these foundations.
How Liquidity Could Improve Over Time
A realistic path forward exists:
Focus on metals that already trade.
Encourage institutional participation.
Build predictable redemption systems.
Allow consolidation rather than fragmentation.
Liquidity grows slowly. Then suddenly. Let’s hope so.
Final Answer: Can Tokenized Metals Reach Global Volume?
Gold: yes, over time
Silver: possibly, with patience
Other metals: niche, specialized use cases only
Tokenization is not a volume generator. It is a volume amplifier—but only where volume already exists. Liquidity is earned, not engineered.
Closing Thought
Tokenized metals are still early. Tokenization technology is ahead of the market structure and vision is ahead of the plumbing. Enthusiasm is always present where success is found. But as Larry David, the comedian said–Curb Your Enthusiasm! But that’s not failure. It’s market reality.
Liquidity comes last—not first. And when it arrives, it will come not because metals were tokenized, but because trust, structure, and participation grew around them.
Until next time,
Yogi Nelson
This article is part of an ongoing, long-form series examining the tokenization of precious metals—one of the few sustained efforts to explore the topic across custody, liquidity, redemption, and market structure over the course of 2026.
Governance and Tokenization in the Junior Mining Space 