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FollowingGold: The tokenization revolution from underground to digital
Gold is the oldest currency on earth. Throughout its history, gold had to be dug out of the ground and refined at huge costs. In a conversation with an organization, David Lucatch believed that this first step was no longer necessary.
His company, nGRND, is tokenizing unmined gold. He believes that the value of gold is already largely conceptual, so mining is nothing more than an expensive ritual.
Ridiculous mining argument
Lucatch points out that the vast majority of gold is in storage. "Gold is one of the few products in the world that is treated like this: People dig it out of the ground, actually destroy the earth, and then put it back-either wear it on their bodies or store it back in warehouses. 86% of gold eventually returns to stored value." he said.
A report released by the World Gold Council at the end of 2025 shows that the global above-ground gold stock of approximately 220,000 tons is distributed as follows:
Jewelry-44%
Gold bars and coins (including ETFs)-23%
Central Bank-18%
Technology and Industry-15%
According to Lucatch's classification, jewelry, investment holdings and central bank reserves are all counted as "stored value", So about 85% of the gold is in storage.
He also pointed out that gold mining companies have been selling stocks, whose value is based in part on untapped gold. "Look at the current listed companies, whether they are exploration, development or junior mining companies, they are all selling shares based on the gold they hold underground. So, we are actually doing the same thing." He explained.
How the model works
Assessing the value of unmined gold is a difficult task, which is one of the reasons it took years for the product to reach market. Lucatch said many industry standards still apply to their business. "We use known indicators, known processes, and processes recognized by governments, industry and regulators to assess the value of gold underground, but we don't mine it." he said.
nGRND also stated that they only issue tokens for a small fraction of each verified deposit to manage risk. Because gold does not cost money to mine, the company can also offer discounted pricing compared to the gold already mined. "When we price gold, we also take into account the fact that it has not been mined. As a result, its price base is different from the price of buying an ounce of mined gold." Lucatch said.
The land above the gold can also be used to create other sources of income. "We create value through alternative uses of land, such as avoiding mining and building solar power plants or waste treatment plants above the land. Without mining gold, we can create value in a variety of ways." he said.
Huge market potential
Lucatch estimates there is still about $10 trillion worth of gold in the world underground. According to the U.S. Geological Survey, the world's gold reserves are 64,000 tons. At current prices of about $4300 an ounce, the gold has a market value of about $8.8 trillion.
"The cost of extracting gold from the ground, maintenance costs, and approval process can take up to 20 years. As a result, most companies actually raise money while the gold is still underground. And we create value while gold is still underground." Lucatch said.
However, geological estimates may change, and if the actual gold reserves of a Kuangqu are less than the certified amount, token holders will face weaker asset support than at the time of purchase. Unlike gold tokens stored in vaults, underground gold tokens cannot be exchanged for physical metal. nGRND is testing whether the market will pay for the scarcity of gold without requiring physical assets.
