Gold

PAX Gold

Chainlink

<a style="text-decoration:none" href="https://bsc.news/post/what-is-chainlink" rel="noopener noreferrer nofollow">Chainlink</a> verifies tokenized gold through a system called Proof of Reserve, which pulls data from a token issuer's off-chain gold vaults and publishes it on the blockchain so anyone can check that the number of tokens in circulation matches the physical gold in storage.&nbsp;
A tokenized gold product, such as PAX Gold (PAXG) or CACHE Gold (CGT), is only worth as much as the metal actually sitting in a vault somewhere. Without an outside check, buyers have to take the issuer's word for it.
<h2 id="span-span-strong-what-problem-does-proof-of-reserve-solve-strong-span-span">What Problem Does Proof of Reserve Solve?</h2>
Tokenized gold works by having a company buy and store physical gold, then mint a matching number of tokens on a blockchain. Each token is supposed to represent a fixed amount of gold, often one troy ounce or one gram.&nbsp;
The risk is that a company could mint more tokens than it has gold to back, either by mistake or on purpose. Chainlink Proof of Reserve addresses this by connecting smart contracts to real-world reserve data instead of leaving verification to quarterly reports or one-time audits.
Chainlink's decentralized oracle network pulls reserve figures from sources like custodian records, vault inventory systems, or third-party attestations. That data gets checked by multiple independent node operators, then published on-chain as a reserve feed. Anyone, including a developer, an auditor, or a regular token holder, can look up that feed and compare it to the token's total supply at any time.
<h2 id="span-span-strong-how-does-the-verification-process-work-strong-span-span">How Does the Verification Process Work?</h2>
Chainlink Proof of Reserve typically follows a repeating cycle:
<ul>
 <li>A data source reports the current quantity of gold held in reserve, such as a custodian's vault record or an inventory management system.</li>
 <li>Independent Chainlink node operators retrieve and confirm that figure.</li>
 <li>The confirmed reserve amount is published as an on-chain data feed, updated on a set schedule or whenever the reserve balance changes by a meaningful amount.</li>
 <li>Smart contracts can read that feed and compare it against the token's circulating supply before allowing new tokens to be minted.</li>
</ul>
Gold-backed&nbsp;<a style="text-decoration:none" href="https://bsc.news/post/understanding-stablecoins-how-they-work-guide" rel="noopener noreferrer nofollow">stablecoin</a> GLDY, issued by Nasdaq-listed Streamex, is a current example of this cycle in action. Streamex integrated Chainlink Proof of Reserve and the Cross-Chain Interoperability Protocol (CCIP) in October 2025, then launched GLDY on February 25, 2026. Its reserve data is published on a live Chainlink feed that anyone can check, and it ties directly into how the token is managed rather than sitting in a separate report.
<h3 id="span-span-strong-why-the-automatic-halt-matters-strong-span-span">Why the Automatic Halt Matters</h3>
The core value of Proof of Reserve, compared to a traditional audit, is timing. An audit tells you what reserves looked like on a specific past date. An on-chain reserve feed tied directly into a token's mint function can stop unbacked tokens from ever being created in the first place, rather than catching the problem after the fact.&nbsp;
Chainlink has used this approach in an earlier version of its Secure Mint feature for tokenized gold, where a smart contract would block new minting the moment reported reserves fell below the outstanding token supply.
<h2 id="span-span-strong-which-tokenized-gold-products-use-this-system-strong-span-span">Which Tokenized Gold Products Use This System?</h2>
PAX Gold, issued by Paxos and redeemable for gold stored in London bullion market vaults, has used Chainlink Proof of Reserve and Price Feeds since 2021. GLDY, the gold-backed stablecoin from Streamex, added Chainlink Proof of Reserve and CCIP in October 2025 and has published live reserve data since its February 2026 launch.&nbsp;
An earlier gold-tokenization project, CACHE Gold, also used Chainlink Proof of Reserve to secure its minting process, but CACHE Gold's CGT token stopped being backed by gold in September 2025, when remaining holders were redeemed into PAXG. It is a useful historical example of how the mint-halting mechanism worked, but it is no longer an active, gold-backed token today.
Tokenized gold has grown into one of the larger corners of the real-world asset market. As of mid-July 2026, PAXG&nbsp;<a style="text-decoration:none" href="https://www.coingecko.com/en/coins/pax-gold" rel="noopener noreferrer nofollow">traded near $4,108</a> per token with a market capitalization above $1.8 billion, and the tokenized gold sector as a whole was valued at roughly $4.8 billion, led by Tether Gold (XAUT) and PAXG, according to CoinGecko data.&nbsp;
PAXG and XAUT together account for close to all trading activity in the category, and both report reserves through independent third-party checks in addition to any on-chain verification tools they use.
<h2 id="span-span-strong-what-are-the-limits-of-on-chain-verification-strong-span-span">What Are the Limits of On-Chain Verification?</h2>
Proof of Reserve is not a full substitute for physical auditing. On-chain data can confirm that a reported reserve figure matches a token's supply, but it cannot, by itself, confirm that the underlying gold bars physically exist or meet purity standards.&nbsp;
Security firm CertiK has noted that answering the question of whether the gold actually exists still depends on custodial records, bar lists with serial numbers, and assay certificates, layers of verification that sit outside what blockchain data alone can capture.
There is also a data-sourcing limit worth understanding. Reporting from CoinDesk found that the independent node operators reporting on PAXG's gold reserves all pull that figure from the same place: Paxos's own systems. Chainlink refers to this setup as a self-attested feed and warns in its own documentation that self-attested feeds carry additional risk, since the underlying number still originates from the issuer rather than from an outside party.&nbsp;
Chainlink has said only a small share of its Proof of Reserve integrations remain self-attested. Chainlink Proof of Reserve is best understood as one layer of a larger verification stack that also includes vault audits, custodian attestations, and regulatory oversight.
<h2 id="span-span-strong-conclusion-strong-span-span">Conclusion</h2>
Chainlink Proof of Reserve gives tokenized gold products a way to publish reserve data on-chain and, in some implementations, tie that data directly into a token's mint function so unbacked tokens can be blocked before they are created. It currently supports reserve verification for PAX Gold and for gold-backed stablecoin GLDY, and it has been used in the past by projects like CACHE Gold before that token wound down in 2025. It does not replace physical audits of vaulted gold, and some feeds, including PAXG's, still rely on data self-reported by the issuer. Even with those limits, it adds a continuously updated, on-chain layer of transparency that periodic reporting alone does not provide.
<h2 id="span-span-resources-span-span">Resources</h2>
<ol>
 <li><a style="text-decoration:none" href="https://chain.link/education-hub/proof-of-reserves" rel="noopener noreferrer nofollow">Chainlink</a>: What Are Proof of Reserves? All You Need To Know</li>
 <li><a style="text-decoration:none" href="https://chain.link/education-hub/tokenized-gold" rel="noopener noreferrer nofollow">Chainlink</a>: What Is Tokenized Gold?</li>
 <li><a style="text-decoration:none" href="https://blog.chain.link/stablecoins-and-proof-of-reserve/" rel="noopener noreferrer nofollow">Chainlink Blog</a>: Proof of Reserve For Collateralized Stablecoins</li>
 <li><a style="text-decoration:none" href="https://messari.io/report/chainlink-proof-of-reserve-por-bringing-transparency-to-the-forefront" rel="noopener noreferrer nofollow">Messari</a>: Chainlink Proof of Reserve (PoR): Bringing Transparency to the Forefront</li>
 <li><a style="text-decoration:none" href="https://www.coindesk.com/tech/2023/07/05/chainlink-proof-of-reserve-proves-little-beyond-data-going-in-coming-out" rel="noopener noreferrer nofollow">CoinDesk</a>: Chainlink 'Proof of Reserve' Proves Little Beyond Data Going In, Coming Out</li>
 <li><a style="text-decoration:none" href="https://www.certik.com/blog/designing-proof-of-reserves-for-tokenized-gold" rel="noopener noreferrer nofollow">CertiK</a>: Designing Proof of Reserves for Tokenized Gold</li>
 <li><a style="text-decoration:none" href="https://www.globenewswire.com/news-release/2026/07/17/3329036/22558/en/Streamex-Corp-Announces-June-2026-Yield-Dividend-Distribution-for-GLDY.html" rel="noopener noreferrer nofollow">GlobeNewswire</a>: Streamex Corp. Announces June 2026 Yield Dividend Distribution for GLDY</li>
 <li><a style="text-decoration:none" href="https://crypto.news/chainlink-partners-with-streamex-to-power-cross-chain-gold-backed-stablecoin-gldy/" rel="noopener noreferrer nofollow">crypto.news</a>: Chainlink Partners with Streamex to Power Cross-Chain Gold-Backed Stablecoin GLDY</li>
 <li><a style="text-decoration:none" href="https://cache.gold/" rel="noopener noreferrer nofollow">CACHE Gold</a>: Compulsory Redemption Notice, confirming CGT is no longer gold-backed</li>
 <li><a style="text-decoration:none" href="https://www.coingecko.com/en/coins/pax-gold" rel="noopener noreferrer nofollow">CoinGecko</a>: PAX Gold (PAXG) Price and Market Data</li>
 <li><a style="text-decoration:none" href="https://www.coingecko.com/en/categories/tokenized-gold" rel="noopener noreferrer nofollow">CoinGecko</a>: Top Tokenized Gold Coins by Market Cap</li>
</ol>

How Does Chainlink Verify That Tokenized Gold Is Backed by Real Gold?

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