Allocated vs Unallocated Metal (SMUs)
Global Gold is built around a clear and deliberate separation between allocated metal and unallocated metal. This distinction mirrors how physical precious metals have traded for decades in institutional markets — but with cryptographic verification, standardized auditability, and digital interoperability.
Understanding this separation is essential to understanding how Global Gold combines real ownership, deep liquidity, and global scalability without compromising physical backing.
Allocated Metal
Allocated metal refers to specific, identifiable physical assets held in approved vaults.
In the Global Gold Protocol, allocated metal is represented on-chain by Conditional Claim NFTs, each tied to a particular bar or coin with verifiable, immutable metadata.
Allocated metal is characterized by the following properties:
The asset is specific and serialized (a particular bar or coin)
Claims are asset-level, not pooled
Assets may trade at premiums or discounts based on size, brand, location, or availability
The holder has a defined, enforceable process for requesting physical delivery through the vault
Allocated metal is ideal for participants who want:
Asset-specific exposure to physical precious metals
Long-term holding or vault-based custody
Certainty around provenance, form factor, and delivery
This is how physical bullion has traditionally been owned and stored — now expressed natively on-chain with enforceable digital ownership.
Unallocated Metal (Standard Metal Units)
Unallocated metal refers to fungible units of standardized metal exposure, rather than claims on specific bars or coins.
In Global Gold, unallocated metal is represented by Standard Metal Units (SMUs) — jurisdiction-specific, fungible tokens such as:
USG — United States Gold
USS — United States Silver
Each SMU represents the fine metal content of institutional-grade physical metal held in approved vaults and collateralized under protocol standards.
Standard Metal Units have the following properties:
Units are fungible and interchangeable
Fully backed 1:1 by standardized physical collateral
Minted and burned deterministically based on verified metal content
Trade at or near spot price, without asset-specific premiums
Optimized for liquidity, trading, and settlement
Unallocated metal in the form of SMUs is ideal for:
Continuous trading and price exposure
Settlement between counterparties
Integration into financial markets and digital infrastructure
This mirrors how most global commodity volume trades today: liquidity first, delivery optional.
Moving Between Allocated and Unallocated
A core feature of Global Gold is the ability to move seamlessly between allocated metal and Standard Metal Units.
Participants can:
Claim allocated metal by using SMUs (such as USG or USS) to acquire a specific bar or coin represented by a Conditional Claim NFT
Redeem allocated metal by withdrawing physical metal from the vault once ownership has been established
These transitions are governed by deterministic protocol rules and executed by vaults — not by issuers, custodians, or discretionary intermediaries.
Why This Separation Matters
This separation is not a design preference — it is a requirement for scale.
Commodity markets function because:
Liquidity trades in standardized, unallocated form
Physical delivery occurs only when needed
Ownership and settlement rules are clear and enforceable
Global Gold preserves this proven structure while removing opacity, discretionary control, and geographic friction.
The result is a system where:
Liquidity can scale globally
Ownership remains real and enforceable
Physical delivery is always possible
Trust is enforced by standards and cryptography — not promises
This is how gold and silver become usable as modern monetary assets without ceasing to be physical metals.
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