The First Uranium-Backed Token Uranium3o8 Is Live on Uniswap
by Oskar Trotman
The blockchain industry recorded its news first on Tuesday (November 21), after the uranium-backed token Uranium3o8 started trading on Uniswap for a spot price of $80.25. Cryptocurrencies backed by precious metals such as gold and silver are nothing new, but so far, no company has decided to tie the value of its digital coin to uranium.
In the case of Uranium3o8, an Ethereum-based ERC20 token, each coin represents a pound of uranium provided by Madison Metals Inc., a Canada uranium exploration company. Sanmiguel Capital Investments LLC handles the issuance of the U token, and the supply is capped at 20 million tokens.
However, unlike other crypto tokens backed by metal or other physical assets, in the case of the $U token, owners cannot immediately redeem their tokens for uranium. According to the issuing company, a physical delivery of uranium is only possible after a purchaser successfully passes a security protocol.
The inspection will ascertain the owner’s intention for the uranium. It goes without saying that trading or making a nuclear bomb is out of the question. There is also a requirement to possess a minimum of 20,000 U tokens, which equals a weight of 10 tons, to be able to redeem the “yellow cake.”
Ready Supply of Uranium
Tokenized physical assets are a new trend in the crypto sector. Using gold to back new tokes was the first choice, considering precious metals were used to back currencies issued by central banks until the 70s of the last century when fiat money came into vogue. Some crypto companies decided to branch out and use bonds as the basis for their tokens.
However, uranium has not been considered a viable option until now. The move makes a lot of sense in the current energy crisis and changing attitudes regarding nuclear power. In the past, this commodity wasn’t traded on the open market but between private buyers and sellers. The U token opens new opportunities for market stability through transparent prices, effectively democratizing ownership of uranium.
Currently, there is a deficit of about 20,000 tons of uranium per year, and the shortage will increase with the announced restarts of nuclear power plants. According to the CEO of Madison Metals, a licensed uranium broker is already interested in redeeming up to $10 million worth of uranium with the intent to transfer the metal to a European enricher. The company has a ready supply of uranium for delivery, but about 20 million pounds are still underground in the Namibia mines owned by Madison Metals and waiting to be exploited.
Tokenized Assets Inaugurate a New Era
Projections for the future of tokenized assets indicate that the market can grow to $10 trillion by the end of the decade, as digital asset firms are pivoting towards tokenization because of the technology’s potential for near-instant settlements and lower trading frictions.
Investors can look favorably at Uranium3o8, thanks to its less opaque price and accessibility to a wider investor base. Presently, residents of Iran, North Korea, and India cannot purchase the $U because of sanctions concerning the delivery of uranium.