Fine Metal Accounting (Purity-Based Backing)
Fine Metal Accounting (Exact Formula)
Standard Metal Units are issued strictly based on fine metal content, not gross bar weight or nominal bar size. This ensures that token supply precisely reflects the amount of deliverable metal backing the system at all times.
The calculation follows a simple, deterministic formula:
Fine Metal Content (troy ounces) = Gross Bar Weight (troy ounces) × Purity
Standard Metal Units are minted 1:1 against this fine metal content.
There are no rounding adjustments, discretionary buffers, or valuation assumptions.
Worked Example: 1 Kilogram Gold Bar (.9999 Fine)
Consider a standard institutional 1 kilogram gold bar with a purity of 0.9999.
Step 1: Convert kilograms to troy ounces
1 kilogram = 32.1507466 troy ounces
Step 2: Apply purity
32.1507466 × 0.9999 = 32.1475315 troy ounces of fine gold
Step 3: Mint Standard Metal Units
The system mints: 32.1475315 USG
This is the maximum and exact amount of USG that can be created from this bar.
No additional USG may ever exist unless additional fine gold is collateralized.
Key Properties of This Model
Because Standard Metal Units are issued on fine metal content:
Bars of different sizes but equivalent fine metal content mint the same number of units
Mixed bar inventories do not introduce redemption slippage
Token supply always equals total fine metal held under collateral title
Exit outcomes are predictable and economically uniform
A user entering the system with USG knows exactly what it represents:
a precise quantity of fine gold, not a claim on a bar, a pool, or an issuer.
Why This Matters
Most legacy systems treat gold as a notional asset and handle purity, premiums, and delivery differences off-ledger. Global Gold encodes these properties directly into issuance math.
This ensures that Standard Metal Units remain:
Fully fungible
Institution-grade
Redeemable in practice, not just in theory
Fine metal accounting is what makes Standard Metal Units monetary, not synthetic.
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