Precious metals
Precious metals tokenization through DALP enables fractional ownership of physical gold, silver, platinum, and palladium while maintaining custody verification and compliance controls. The platform handles custody tracking, purity verification, and regulatory compliance.
Who should read this: Precious metals dealers, vault operators, custodians, and asset managers exploring tokenized commodity offerings.
Business value: Lower minimum investment thresholds for physical metals, provide transparent custody verification, enable secondary liquidity, and maintain real-time visibility into metal holdings and purity grades.
Business challenge
Golden Reserve Vaults holds $50 million in allocated gold bars stored across multiple secure facilities. They want to offer fractional ownership of physical gold to retail and institutional investors while maintaining rigorous custody controls and regulatory compliance.
Traditional approach
How DALP solves it
Metal tokenization with custody backing
Golden Reserve creates 500,000 precious metal tokens, each representing 0.1 troy ounce of .9999 fine gold. Token holders have a claim on physically allocated gold bars held in audited vaults, with custody verification recorded on-chain.
Custody verification and documentation
The platform enforces that only verified custodians can attest to metal holdings. Custody documents—vault receipts, assay certificates, insurance policies, audit reports—are hashed and linked to the token metadata for permanent transparency.
Fractional ownership
Investors can purchase as few as 10 tokens (1 troy ounce equivalent) or as many as they want up to regulatory limits. The platform enforces maximum ownership percentages via compliance modules to maintain distributed ownership and regulatory compliance.
Metal type and purity tracking
Each token series specifies the metal type (gold, silver, platinum, palladium) and purity grade (e.g., .9999 fine, .999 fine). This metadata is immutable and verifiable on-chain, ensuring investors know exactly what backs their tokens.
Custody attestation updates
Periodic custody attestations update the verified holdings through the admin portal. Attestations include bar numbers, weights, purity certifications, and vault locations. Holders see current custody status without requesting reports.
Compliance with commodity and securities regulations
The platform enforces applicable commodity trading regulations, securities laws for investment products, and AML/KYC requirements. Transfer restrictions ensure only verified investors can hold and trade tokens.
Redemption mechanisms
Token holders can redeem tokens for physical metal delivery (subject to minimum quantities and delivery fees) or cash settlement based on spot prices. The platform calculates redemption values automatically using configured price oracles.
Key capabilities
| Capability | Traditional | With DALP |
|---|---|---|
| Minimum investment | Full bar (~$60K for gold) | 0.1 oz (~$200) |
| Custody verification | Annual audits | Real-time on-chain attestations |
| Purity documentation | Paper certificates | Immutable on-chain metadata |
| Ownership visibility | Periodic statements | Real-time dashboard |
| Secondary transfers | Physical delivery required | Trade tokens with compliance checks |
| Redemption | Complex logistics | Automated cash or physical settlement |
Measurable outcomes
Democratized access – Precious metals investment becomes available to smaller investors who cannot purchase full gold or platinum bars.
Transparency – Investors see custody status, purity grades, and vault locations in real time rather than waiting for periodic statements.
Operational efficiency – Custody attestations and ownership transfers that used to require extensive documentation now execute automatically with full audit trails.
Secondary market – Token holders can sell positions to other qualified investors, creating liquidity without physical metal movement.
The diagram above shows the DALP precious metals lifecycle, from tokenization through automated custody verification to secondary liquidity.
Compliance considerations
Precious metals tokens operate under commodity and securities regulations:
- Investor verification – Enforced via identity claims for KYC/AML
- Custody requirements – Verified custodian attestations required
- Transfer restrictions – Holding requirements, geographic limitations
- Commodity regulations – CFTC compliance for commodity-backed tokens
- Securities laws – SEC registration or exemption requirements
For detailed compliance architecture, see Compliance & Security.
Implementation checklist
- Structure custody arrangement with licensed vault operator
- Define token economics (total supply, metal weight per token, purity grade)
- Configure metal type metadata (gold, silver, platinum, palladium)
- Capture custody location metadata (vault name, jurisdiction)
- Select compliance template based on regulatory requirements
- Integrate KYC/AML provider for investor verification
- Configure custody attestation workflow with vault operator
- Upload custody documents (vault receipts, assay certificates, insurance)
- Deploy asset and conduct primary token sale
- Configure redemption mechanisms (physical delivery, cash settlement)
Limitations and considerations
- Custody integration – Platform provides attestation registry; integration with specific vault management systems may require custom API development
- Price oracles – Redemption calculations require reliable spot price feeds; oracle integration configuration needed
- Physical delivery – Logistics for physical metal delivery require coordination with vault operators and shipping providers
- Regulatory complexity – Commodity and securities regulations vary by jurisdiction; legal counsel review required
Next steps
- Review Compliance & Security to understand embedded compliance controls
- Explore Developer Documentation for custody attestation customization
- Contact your SettleMint representative to discuss a precious metals tokenization pilot
Real estate
Real estate tokenization through DALP democratizes access to institutional-quality properties while calculating rental income entitlements and maintaining compliance controls. The platform handles fractionalized ownership, expense tracking, and property governance.
Stablecoins
Bank-issued stablecoins through DALP provide instant settlement infrastructure for B2B payments while maintaining reserve transparency and regulatory compliance. The platform handles minting, redemption, transaction monitoring, and reserve management.