For decades, the standard critique of gold from Wall Street has been simple: it’s a “pet rock.” It looks nice, it holds value over time, but it sits in a vault doing absolutely nothing. Unlike stocks that pay dividends or bonds that offer coupons, gold has traditionally been a non-yielding asset that actually costs money to hold via storage and management fees.
In a recent appearance on The Watch List, Morgan Lekstrom, Executive Chairman of Streamex (NASDAQ:STEX), sat down with host Ricki Lee to discuss the launch of GLDY, a new gold-backed tokenized security that aims to flip that narrative on its head.
The Core Differentiator: Yield vs. Fees
The primary hurdle for gold investors has always been the “drag” of holding the asset. If you buy a traditional Gold ETF (like GLD), you typically pay between 30 to 40 basis points (0.3% – 0.4%) in annual fees.
Lekstrom points out that GLDY changes the fundamental math of precious metals:
- Physical Backing: Like an ETF, it is 1-to-1 backed by physical gold.
- The Yield Advantage: Instead of paying to hold it, GLDY holders can earn up to 400 basis points (4%) in annualized yield.
“We are marrying what I call real-world activity, the use of gold, to the asset,” Lekstrom explained. “We’re making it not a pet rock. We’re putting use to it… and passing that use metric down to the holder.”
How it Works: The Gold Leasing Model
The secret sauce behind the 4% yield is a partnership with Monetary Metals, a leader in the gold leasing space. By leasing gold to “value-add” users, such as manufacturers or jewellers, the asset generates a return.
This model is particularly durable because it thrives on market volatility. For manufacturers, leasing gold removes the capital risk of buying and hedging the metal outright, turning a capital expenditure into a simpler operating expense.
“That market is very underutilized for gold right now,” says Lekstrom. “It’s craving for it.”
Bridging the Gap: TradFi Meets DeFi
While GLDY utilizes decentralized finance (DeFi) infrastructure to manage the tokenization, it is built to live comfortably within the world of Traditional Finance (TradFi). Because it is structured as a security, it is accessible to:
- Individual retail investors
- Asset Managers and RIAs
- Institutional ETFs
- IRAs
Lekstrom noted that the new generation of investors, much like his son, who prefers a digital representation of a coin on an iPhone to a physical one, wants the security of knowing the gold is there without the burden of physical storage.
The Road Ahead: A “Cascade Effect”
Streamex is entering the market with significant momentum, boasting over $100 million in indications of interest. Lekstrom, citing the conservative approach of Chief Investment Officer Mitch Williams (formerly of Oppenheimer and the Kuwaiti Sovereign Wealth Fund), has set a first-year goal of $1 billion in assets under management.
“We anticipate a cascade effect,” Lekstrom said. “Once you get one or two people buying this and it’s taking away some of their ETF fees… we anticipate it growing quickly.”
The company isn’t stopping at gold, either. With an exclusive partnership with Monetary Metals for all precious metals, Streamex plans to apply this yield-bearing model to silver and other assets in the near future.
For more information on GLDY and Streamex visit: https://www.streamex.com/GLDY