Investing in Rare Earth Metals Easy on Arbitrum

Raredex is now live on the Arbitrium blockchain. This marks a significant shift in access to an asset class that has long been reserved for institutional investors.

Raredex is a blockchain-based platform on the Arbitrum network that allows investors to access rare earth metals. Rare earth metals, needed for businesses ranging from emerging technology to renewable energy, have traditionally been difficult for retail investors to access due to high entry costs, often above $10,000. Raredex solves this problem by enabling fractional ownership using blockchain-based tokenization, where each token represents one kilogram of physical metal.

Louis O’Connor, CEO of Raredex, highlighted the potential for democratization and said “Early adopters” will now have access to an asset class “usually reserved for governments” or “well-connected, wealthy” individuals. Now, smaller investors will be able to enter the market by requiring much less capital.

How does Raredex work?

Raredex stores its physical metals in a bank-grade vault operated by Tradium in Germany to provide access to custody and availability. Investors can verify the source of their tokens as each one is tagged with comprehensive source of origin data. Using blockchain technology, an immutable record of ownership is created, reducing the possibility of fraud and increasing transparency.

The launch of the platform comes at a time when interest in RWA tokenization is growing. This update follows a larger trend towards tokenizing real-world assets. In 2023, the RWA class grew by 700% to $860 million in revenue. RWAs are expected to be a $16 trillion market by 2030, according to Boston Consulting Group and ADDX. Blockchain’s decentralized, tamper-proof nature will increase transparency and trust, while fragmentation will open up new ways to access and invest in valuable assets.

The chart predicts that the tokenization of global illiquid assets will reach $16.1 trillion by 2030, representing 10% of global GDP. This shows that Raredex, which operates in the RWA category, is poised for growth. Retrieved from ADDX by Crypto.news.

Other similar ventures include UBS Asset Management’s Ethereum-hosted tokenized investment fund and Archax’s $4.8 billion money market fund on the XRP Ledger.

As demand for rare earth metals increases due to innovations in technology and clean energy, Raredex’s platform could be a model for a broader wave of commodity trading on blockchain, thereby transforming how investors interact with physical assets.