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Risk Disclosure
What are AUXM Tokens?
AUXM tokens represent the primary physical gold pricing exposure asset class within the XMG Token Series, collateralized on a dollar‑for‑dollar basis by a PECU‑based Digital Asset Treasury.
Each XMG token series, including AUXM, has a main token class and verified institutions have the option to mint their own issuer‑identified AUXM variants, enabling them to operate within their own ecosystem while maintaining full control over cash‑in/cash‑out flows, utility functions, physical reserves and partnership integrations.
These issuer‑specific AUXM tokens remain fully interoperable with the main AUXM class across both the native PNP16 protocol and ERC‑20 environments.
Refineries and institutions with verified vaulted physical gold, as well as mining companies with geologically proven and legally owned unencumbered physical gold reserves, may request authorization to mint AUXM tokens that represent their underlying physical assets.
This framework transforms physical gold into a transparent, tokenized financial instrument, enabling liquidity, fractional ownership and collateralization within a Digital Asset Treasury (DAT).
By combining PECU collateral with tokenized real‑world physical gold reserves, AUXM establishes a dual‑layer trust model that modernizes physical commodity finance and expands institutional access to on‑chain asset‑backed instruments.
Key Characteristics of AUXM Tokens
Asset Backed
Every AUXM exposure token is secured by a PECU‑based Digital Asset Treasury on a dollar‑for‑dollar value basis.
Direct Exposure
AUXM exposure tokens are pegged to real‑time global pricing for physical gold.
Transportable
Transporting physical gold is costly and operationally complex, AUXM provides instant, low‑cost pricing exposure without the burdens of physical movement.
Institutional Focus
Physical redemption privileges are determined solely by each issuer and are limited to verified institutional customers such as brokerage firms, funds, and exchanges.
Strict Compliance
All issuer‑approved institutional redemptions require mandatory KYC/AML verification.
24/7 Trading Ability
AUXM exposure tokens are tradable 24/7/365 on any exchange or platform that lists them.
Fractionalization
AUXM is inherently fractionalized up to 15 decimal places, overcoming the indivisibility of physical gold.
Investor Control
Institutional AUXM exposure token holders may self‑custody or act as custodians for others, managing their own logistics and costs if an issuer grants physical redemption.
Utility and Advantages
How AUXM Tokens Work
Asset Backed: Every AUXM token is secured by a PECU coin based Digital Asset Treasury and accumulated physical gold or reserves.
On Demand Supply: AUXM tokens have an initial supply of 100,000 tokens, once distributed verified institutions, gold refineries and mining companies with unencumbered and verified gold reserves can request to mint additional AUXM tokens specific to their organization.
Redemption Option: Redemption parameters and timelines are at the option of the issuer, ONLY verified institutional customers can redeem AUXM for physical assets, subject to monthly limits.
Redemption Limits: Capped at 100 AUXM tokens per month or 20% of a holder’s total AUXM balance, whichever is lesser.
Holder Responsibilities: Token holders converting to physical assets cover export, logistics, customs and storage costs.
Freely Tradable: AUXM tokens can be traded, transferred or collateralized within Digital Asset Treasuries for the life of the token.
AUXM tokens are designed for institutions seeking exposure to physical gold with the option for conversion in the future or digital open market liquidity for trading purposes. They also provide gold refineries and mining companies a pathway to unlock liquidity without selling their verified reserves, while enabling them to build a trusted customer base for AUXM‑to‑gold conversions of their legally owned and authenticated reserves.
Gold Markets Overview
The global gold market is a dynamic ecosystem that connects miners, refiners, dealers, financial institutions, and investors. It is anchored in the trade of physical gold, primarily through standardized formats such as Good Delivery bars, and priced in real-time via the spot gold market.
Good Delivery & Accepted Bar Sizes
Gold bars that meet London Bullion Market Association (LBMA) Good Delivery standards are considered the benchmark for international trade. These bars must:
Weigh between 350 to 430 troy ounces (~11 to 13 kg), with a standard weight of 400 oz.
Have a minimum purity of 99.5% (995 fine).
Be produced by LBMA-accredited refiners.
Feature stamped serial numbers, refiner’s mark, fineness, and year of manufacture.
Smaller accepted bars for retail and institutional trade include:
1 kg bars (often traded in Asian markets)
100g, 250g, 500g bars (retail investors)
Minted coins (sovereign, krugerrand, etc.)
Spot Gold, Storage, Refining & Transport Costs
Spot Price is determined in real-time by global trading activity, based on the most immediate delivery contracts. It is the benchmark for pricing.
Secure storage of gold bars in bonded warehouses or bank vaults incurs fees based on bar size and location. Rates vary from 0.1% to 0.5% annually of the asset’s value.
Raw gold, including dore or alluvial gold, must be refined to meet purity standards. Refining costs typically range from $1 to $5 per gram, depending on volume and purity.
Secure transport (typically armored logistics services) is expensive, often $1,000+ per shipment, with additional insurance costs based on value and destination.
Risks of Discounted Alluvial Gold from Africa
While Africa is a rich source of gold, engaging in the discounted alluvial gold trade comes with significant risks:
High rates of fraudulent transactions, fake documents, and fake gold.
Export restrictions, lack of legal infrastructure, and opaque supply chains.
Theft, political instability, and logistical challenges increase exposure to loss.
Alluvial gold often requires expensive and uncertain refining processes to meet market standards.
