Raredex Live on Arbitrium Blockchain: Democratizing Rare Earth Metal Investments

Raredex, a blockchain-based platform on the Arbitrum network, has launched, providing retail investors with access to rare earth metals. Historically, these metals have been difficult for individual investors to access due to high entry costs, often exceeding $10,000.

Breaking Down Barriers for Retail Investors

Raredex tackles this issue by enabling fractional ownership through blockchain-based tokenization. Each token represents one kilogram of physical metal, making it possible for smaller-scale investors to enter the market with less capital.

Louis O’Connor, CEO of Raredex, emphasized the platform’s potential for democratization, stating,

“Early adopters” will now be able to access an asset class that was “typically reserved for governments” or the “well-connected, wealthy” individuals.

How Raredex Works

Raredex stores its physical metals in a bank-grade vault operated by Tradium in Germany, ensuring secure custody and availability. The platform utilizes blockchain technology to provide an unchangeable record of ownership, reducing the risk of fraud and increasing transparency. Investors can also verify the provenance of their tokens through extensive source-of-origin data.

Riding the Wave of RWA Tokenization

The launch of Raredex coincides with growing interest in RWA tokenization. This trend is part of a larger movement to tokenize real-world assets. In 2023, the RWA class grew by 700%, generating $860 million in revenue. According to forecasts, RWAs are expected to become a $16 trillion market by 2030.

Some key benefits of RWA tokenization include:

  • Increased transparency and trust through the decentralized, tamper-proof nature of blockchain
  • Fragmentation, which opens up new ways to access and invest in valuable assets

A Growing Market

Estimates suggest that the tokenization of global illiquid assets will reach $16.1 trillion by 2030, representing 10% of global GDP. As the demand for rare earth metals continues to rise due to innovations in technology and clean energy, Raredex’s platform could serve as a model for a wider wave of commodity trading on the blockchain.

Other initiatives, such as UBS Asset Management’s Ethereum-hosted tokenized investment fund and Archax’s $4.8 billion money market fund on the XRP Ledger, demonstrate the growing interest in RWA tokenization.

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