Gold has historically spent long stretches sitting idle in vaults. That picture is beginning to shift. An increasing share of the metal is now being put to work as collateral in decentralized finance (DeFi) lending markets.

Tether's tokenized gold, XAUT, valued at $94.6 million, is currently deposited across DeFi platforms, with Aave and Uniswap holding the majority of it, according to research data cited by CryptoBriefing.

Where the Gold Is Going

Aave accounts for the bulk of the activity. The research shows the lending protocol captured 74.2% of XAUT DeFi deposits, primarily through its V3 and V4 markets.

Growth has been rapid. Aave's XAUT deposits climbed from around $40 million in early June 2026 to approximately $76.7 million by mid-August, an increase of roughly 91.7% in about ten weeks.

A separate snapshot in the research puts total XAUT DeFi deposits at $102.9 million across approximately ten venues as of early September 2026, marking the first time deposits crossed the $100 million threshold.

Within Aave, the newer V4 markets are drawing in fresh capital. V4 attracted about $8 million in net inflows over a 90-day period, while earlier venues recorded outflows — a pattern consistent with holders repositioning into the newer market.

Uniswap remains the main decentralized exchange for trading the token. Its V3 pools held about $16.5 million in XAUT liquidity in mid-2026, though its share of total deposits appears to be shrinking as users shift toward Aave's lending products.

Gold as Collateral, Not Just a Hedge

On Aave, XAUT functions as an ERC-20 token that can back loans. Users deposit XAUT, borrow stablecoins against it, and retain full exposure to gold's price movements.

The research notes that Aave has processed liquidations of XAUT positions successfully during periods of volatility. That record is relevant for a collateral market, since orderly liquidations are central to how a lending venue absorbs stress.

For context, XAUT deployed in lending pools represents only about 1.5% of the combined market capitalization of XAUT and PAXG, the two leading tokenized gold products. The figure underscores how early the DeFi chapter is: the overwhelming majority of these on-chain bullion tokens still sit outside lending markets.

Tether Keeps Minting Gold

The supply side is expanding as well. Tether minted approximately 119,670 additional XAUT tokens, worth around $495 million, in late September 2026.

Each token is backed by physical gold held in Swiss vaults, according to the research. The single mint pushed XAUT's on-chain supply higher by an amount that dwarfs the entire DeFi deposit base.

The research flags an open question: whether the new supply reflects fresh demand and new uses, or is largely a redeployment of holdings that already existed in another form.

What It Means

The clearest takeaway is concentration. With Aave holding 74.2% of XAUT DeFi deposits, the tokenized gold lending market is effectively dominated by a single lending venue, meaning the trajectory of tokenized-gold lending is closely tied to how Aave's gold markets develop.

The gap between supply and usage is the figure to watch. Tether's roughly $495 million mint is several times larger than the entire DeFi deposit base. If a meaningful portion of that new supply flows into lending markets, the 1.5% utilization rate could begin to climb.

Source: CryptoBriefing