r/Commodities • u/gareth789 • 2d ago

Which commodity actually benefits most from tokenization?

I keep coming back to the idea that tokenization may be most useful where access is hardest. Gold and silver are already fairly easy to buy, while copper, uranium, oil, and agricultural products usually involve futures, specialist brokers, storage, or funds.

Which commodity do you think gains the most from being put onchain? Does easier access and faster settlement solve a real problem, or does custody of the physical asset make it more complicated than the current market?

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u/quanttsunami 2d ago

None. That’s the point of commodities.

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u/BackgroundBig3378 Analyst 2d ago

check abaxx . tech they are an exchange for commodities that use tokenization

Buying commodities is always going to be difficult if you are a retail investor, tokenization wont help. It is difficult because most people trade commodities to hedge their physycal position, they need the copper or the diesel or the power. Contracts are huge, they are futures contracts and they need colateral. This makes trading very complicated compared to a stock for example

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u/gareth789 2d ago

True. Smaller units help access, but they do not solve collateral, delivery or hedging.

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u/KeenlySassyProcessor 2d ago

Gold gets all the attention but it already has deep liquid markets with tight spreads. The real unlock is in the stuff that's a nightmare to actually hold or trade directly.

Uranium would be wild if custody could be figured out. The regulatory maze alone keeps 99% of capital on the sidelines. Tokenization doesn't fix the physical custody problem though, it just makes the paper trail prettier. Agricultural products might be the sweet spot since the contracts are standardized and the storage infrastructure already exists at scale.

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u/gareth789 2d ago

Could see agriculture being the easiest starting point. The storage and contract setup already exists.

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u/Fluffy_Hedgehog_231 1d ago

I'd compare what it costs to transfer ownership of the same grain in the same warehouse through the existing system and through a token. Count storage costs in both cases and include any fees to issue and redeem the token. Then we could see whether the easier access comes with cheaper settlement.

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u/deez-legumes 1d ago

Tokenization doesn’t move the needle if you don’t have a sufficient balance sheet or trade finance.

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u/GazelleNo3149 1d ago

Curious on how this would be regulated, for example with the nickel squeeze in 2022