Redeemability index

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RWA • Bullion • Trust Verification

index

Redeemability Index — Metal-Backed Tokens

This index compares gold and silver-backed tokens based on their ability to be redeemed for physical metal, storage type, audit transparency, and geographic availability. Not all metal-backed tokens offer real-world delivery or allocated storage, making redeemability a key differentiator.

Use Case: Helps identify which digital bullion tokens can be trusted to represent real, deliverable metal versus those that simply track price.

Key Concepts:

Redeemable Asset — Token exchangeable for its underlying physical asset
Allocated Storage — Specific bullion assigned to a specific holder in a vault
Unallocated Storage — Pooled metal holdings without individual assignment
Physical Collateral — Vault-held assets securing on-chain tokens
Metal-Backed Tokens — Digital assets backed by physical gold or silver reserves
Metal-Backed Currency — Monetary systems anchored to physical bullion
Tokenized Gold — Digital representation of physical gold reserves
Tokenized Silver — Digital representation of physical silver reserves
Tokenized Precious Metals — On-chain tokens backed by vaulted bullion
Digital Bullion — Blockchain-native precious metal holdings
Kinesis Money — Metal-backed monetary system with yield distribution
Real Asset Yield Index — Comparison framework for metal-backed yield tokens
Bullion Vault — Secure storage facility for physical precious metals
Hard Assets — Tangible stores of value resistant to monetary debasement
Sound Money — Currency backed by scarce, tangible value
Real-World Assets — Physical or traditional assets tokenized on-chain
KYC – Know Your Customer — Identity verification required by some redemption platforms
Self-Custody — Full private key control over digital asset holdings

Token	Metal	Redeemable?	Backing	Storage Type	Audit & Transparency	Notes
$KAG	Silver	Yes	1 oz per token	Fully Allocated	Yes — Kinesis vault audits	Physical redemption available via Kinesis
$KAU	Gold	Yes	1 gram per token	Fully Allocated	Yes — Kinesis vault audits	Physical redemption available via Kinesis
$PAXG	Gold	Yes	1 oz per token	Allocated (Brinks)	Yes — Paxos audits	Requires KYC & high minimum for redemption
$XAUT	Gold	Yes*	1 oz per token	Allocated (Swiss vaults)	Limited disclosure	*Terms-based redemption; centralized issuer
$AUX	Gold	Variable	Varies by issuer	Unverified / Mixed	Depends on platform	Check issuer terms for redeemability

Redeemability Trust Score Reference

six trust dimensions that determine whether a metal-backed token is a claim on real bullion or a promise on paper

Trust Dimension	What It Verifies	$KAG/$KAU	$PAXG/$XAUT/$AUX
Physical Delivery	Can you take possession of actual metal?	Yes — global delivery through Kinesis	$PAXG: Yes (high minimum) • $XAUT: Restricted • $AUX: Varies
Allocated vs Unallocated	Is specific metal assigned to your tokens?	Fully allocated — each token corresponds to specific vaulted metal	$PAXG: Allocated • $XAUT: Allocated • $AUX: Often unclear
Audit Transparency	Are reserves independently verified and publicly reported?	Yes — regular vault audits published	$PAXG: Yes • $XAUT: Limited • $AUX: Platform-dependent
Minimum Redemption	How much must you hold to redeem?	Accessible minimums for both gold and silver	$PAXG: ~$17,000+ • $XAUT: 50 tokens+ • $AUX: Varies
Yield on Holding	Does the token generate income while you wait?	Yes — Holder’s Yield + Velocity Yield, paid in metal	None — all three are passive price trackers only
Issuer Jurisdiction Risk	Could the issuer freeze, restrict, or blacklist tokens?	Low — Kinesis operates across multiple vault jurisdictions	$PAXG: US-regulated • $XAUT: BVI entity • $AUX: Unknown

Key Insight: Redeemability is not binary. “Redeemable” can mean physical delivery in any amount, or it can mean restricted terms with six-figure minimums and legal conditions. The Redeemability Index does not ask “can you redeem?” — it asks “how easily, how transparently, and at what cost.” A token that is technically redeemable but requires $17,000 minimum and centralized KYC is fundamentally different from one that lets you redeem a single ounce of silver with a verified account. The distance between “redeemable” and “practically redeemable” is where most investors get surprised.

Redeemability Evaluation Framework

four layers of due diligence before trusting a metal-backed token with real capital

Layer 1 — Proof of Reserves
– Does the issuer publish regular, independent vault audits?
– Can you verify the total supply against reported reserve holdings?
– Are vaults in stable jurisdictions with legal protections?
– Has the issuer ever failed an audit or delayed publication?
If the reserves are not provable, the token is a trust exercise, not an asset

Layer 2 — Redemption Access
– What is the minimum amount required to redeem for physical metal?
– Is delivery available to your geographic region?
– What fees, delays, and KYC requirements apply to redemption?
– Has anyone publicly documented a successful redemption?
A redemption right you cannot practically exercise is a right in name only

Layer 3 — Storage Model
– Is storage fully allocated (specific bars assigned) or unallocated (pooled)?
– Allocated storage means your metal exists as a distinct, identifiable holding
– Unallocated storage means you have a claim on a pool — not specific metal
– In issuer insolvency, allocated holders have stronger legal standing
Allocated is ownership. Unallocated is a promise. Know which one you hold

Layer 4 — Yield & Sovereignty
– Does the token generate yield while being held? From what source?
– Kinesis $KAG/$KAU: Holder’s Yield + Velocity Yield from real fees
– Can the issuer freeze, blacklist, or restrict your tokens?
– Is self-custody possible, or must tokens remain on the issuer’s platform?
The best metal token earns while it sits, redeems when you ask, and never asks permission

Redeemability Audit Checklist

verify that your metal-backed tokens are backed, audited, redeemable, and earning

1. Backing & Reserves
☐ Token is 1:1 backed by vault-held physical bullion
☐ Storage is fully allocated — not pooled or unallocated
☐ Independent vault audits published on a regular schedule
☐ Total token supply verifiable against reported reserve totals
☐ No fractional reserve or synthetic backing in token structure
If you cannot verify the metal exists, you are holding a number, not an ounce

2. Redemption Pathway
☐ Physical delivery confirmed — available to your jurisdiction
☐ Minimum redemption amount is within your holding range
☐ Fees and timelines documented — no hidden costs
☐ At least one public redemption case verified or documented
☐ Redemption process tested or walkthrough completed
A redemption pathway you have not reviewed is a pathway you cannot trust

3. Yield & Performance
☐ Yield active — Holder’s Yield and/or Velocity Yield confirmed
☐ Yield source verified — real transaction fees, not inflation
☐ Monthly distributions logged and tracked over time
☐ Compared against non-yielding alternatives ($PAXG, $XAUT)
☐ Yield compounding into same metal — gold earns gold, silver earns silver
A metal token without yield is a receipt. A metal token with yield is an engine

4. Sovereignty & Estate
☐ Self-custody option available or tokens held in verified account
☐ Issuer cannot freeze or blacklist tokens without legal process
☐ Secure crypto holdings in Ledger or Tangem
☐ Route profits into Kinesis $KAG/$KAU for metal preservation
☐ Layer Cyclo, SparkDEX, and Enosys for yield above the metal base
☐ Estate plan includes redemption instructions for heirs
Redeemable metal that dies with the key holder is buried treasure, not generational wealth

Capital Rotation Map

redeemability matters most when markets contract — verifying it during the calm ensures it is available during the storm

Phase	Capital Flow	Redeemability Role
1. BTC Accumulation	Fiat/Stables → BTC	Verify — audit redemption pathways, test small delivery, review vault reports
2. ETH Rotation	BTC profits → ETH	Maintain — metal base continues earning yield while DeFi capital deploys
3. Large Cap Alts	ETH → XRP, FLR, HBAR	Anchor — redeemable metal provides stability beneath alt volatility
4. Small/Meme Rotation	Alts → Memes/Microcaps	Untouched — the metal floor earns while speculative capital rotates above it
5. Peak Distribution	Crypto → Stables/RWA	Critical — rotate profits into redeemable $KAG/$KAU before the drawdown hits
6. RWA Preservation	Stables → $KAG/$KAU	Maximum position — capital rests in audited, redeemable metal that earns yield

Redeemable Means Nothing Until You Test It: Every metal-backed token claims some form of redeemability. The Redeemability Index separates the provable from the theoretical. $KAG and $KAU offer allocated storage, regular audits, physical delivery, and yield — all from real economic activity, not inflationary emissions. $PAXG offers redemption but with high minimums and US regulatory exposure. $XAUT offers Swiss vaults but limited disclosure. $AUX varies by issuer. The time to test redemption is Phase 1, when the market is quiet and there is no urgency. By Phase 5, everyone wants physical metal — and the tokens that cannot deliver become obvious. Route profits into Kinesis $KAG/$KAU for preservation. Layer Cyclo for liquid staking, SparkDEX for dividends, and Enosys for lending. Secure everything in Ledger or Tangem. Trust is not a feature — it is something you verify before you need it.

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