Streamex Corp. shares have jumped more than 15% on Tuesday, but the single-day gain comes against a difficult backdrop, with the stock down 64.8% year-to-date. It has also lost 60.9% over the past 12 months.
The company's co-founder and chief executive officer recently spoke exclusively to Investing.com about its flagship product, GLDY, a tokenized gold instrument designed to pay investors a 3.5% annual yield in physical gold.
In an interview, CEO Henry McPhie explained that GLDY generates its yield through gold leasing, a decades-old practice in the bullion market.
"The yield comes from gold leasing, which is a well-established practice that has existed in the bullion market for decades," McPhie stated, adding that institutional counterparties including jewelers, refiners and bullion banks pay a lease rate to use the gold while token holders retain title throughout.
McPhie added that the structure is designed to insulate investors from counterparty risk.
“The gold itself is RFID-tagged so we can track it inside the lessee’s facility. Every position is over-collateralized, so the lessee posts collateral worth more than the gold they are using,” McPhie explained. “We carry two layers of insurance from tier-1 carriers. And we run spot checks and ongoing inventory audits during the term of every lease.”
He said that in practice, the structure “looks a lot more like secured institutional lending, except the investor’s title to the gold is never impaired in the first place.”
Reserves are verified in real time through Chainlink, an on-chain oracle, and audited monthly by EisnerAmper.
When it comes to the potential bankruptcy of one of the companies leased to, the co-founder and CEO stated that the lessee takes the loss, not the token holder.
“Our leases are operating leases. There is no credit component, no debt instrument, and the gold is not commingled with the lessee’s balance sheet or pledged into their capital structure,” he explained.
“If a lessee enters bankruptcy, the gold is not part of their credit estate and cannot be reached by their creditors. It gets returned, and any gap is covered by the over-collateralization and the insurance layers sitting in front of the investor.”
For investors who want to exit a position, McPhie mentioned that they can redeem GLDY at any time on a T+2 basis, and they choose U.S.dollars, USDC, or the delivery of physical gold.
He stated: “There is no lock-up. In the near term, it will look even more like trading a stock. We are launching a full secondary market for GLDY together with instant mint and redeem liquidity from institutional market makers.”
Looking ahead, Streamex believes “the same architecture, title-bearing, insured, audited, on-chain, applies to the rest of the real-asset universe,” with McPhie stating that this is where the company is heading.
“Next up is a non-security version of GLDY to broaden access,” he said. “After that, silver, then a tokenized royalties and streams product, which is a category we are particularly focused on because those cash flows already behave like yield-bearing real assets.
source https://www.investing.com/news/stock-market-news/exclusive-streamex-ceo-explains-goldleasing-model-behind-gldy-4699138
