Wrapped Herculis Gold Coin — version comparison

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Create XAUH.md

23 Sept 2026, 17:02 UTC · PaoloDiStef · 14bc276 · assessments/draft/XAUH.md

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Update XAUH.md

27 Sept 2026, 11:56 UTC · PaoloDiStef · 825d268 · assessments/draft/XAUH.md

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Structured data (12 changes)

Field	Before	After
Risk parameters
risk_parameters.retained_reserve	0.2	0.25
risk_parameters.global_minting_limit	100000	250000
risk_parameters.liquidation_price	100	80
Risk scores
risk_scores.tail_risks.counterparty_risks[0].name	Issuer, custody and redemption dependency	Herculis Group
risk_scores.tail_risks.smart_contract_risks[0].name	Admin-control risk	Smart-Contract Exploit
risk_scores.tail_risks.governance_risks[0].name	n/a	Issuer/admin-control and custody intervention risk
risk_scores.tail_risks.governance_risks[0].probability	n/a	Low
risk_scores.tail_risks.governance_risks[0].severity	n/a	Severe
risk_scores.tail_risks.governance_risks[0].compensation	0%	0.5%
risk_scores.tail_risks.liquidity_risks[0].name	Thin Ethereum liquidity and concentrated holder base	Secondary Market Liquidity & Minting/Redemption Impairment
risk_scores.tail_risks.liquidity_risks[0].probability	Medium	Low
risk_scores.tail_risks.liquidity_risks[0].compensation	1.00%	0.5%

Narrative (markdown)

assessments/draft/{XAUH.md@14bc276 → XAUH.md@825d268} RENAMED Viewed

@@ -6,26 +6,22 @@
 The underlying RWA exposure is gold, which is a high-quality collateral asset with low expected market volatility.
-A conservative global minting limit of ZCHF 250,000 and an interest rate of 2.5% are however required to address XAUH's nature as a tokenized-gold wrapper with issuer, custody, redemption, admin-control risk, and limited liquidity.
 ## Introduction
-XAUH is an ERC-20 token that gives holders exposure to physical gold. The issuer describes the asset as backed by Swiss-stored, insured, and audited LBMA 999.9 gold, with regular audit reports by KPMG. XAUH also exists on other networks, including TON and TRON.
-The relevant collateral exposure for Frankencoin is the Ethereum version of XAUH. Liquidity, redemption, transferability, and liquidation feasibility must therefore be assessed on the Ethereum token itself. Liquidity on TON, TRON, or other networks should not currently be counted toward Ethereum liquidation depth unless reliable cross-chain conversion is available to ordinary market participants.
-The primary liquidity therefore arises from the XAUH/USDT Uniswap pool, until the listings on BTSE and Biconomy also include the Ethereum token version (currently, only TON & TRON are available).
 ## Free Float/Liquidity
 Classification: Sufficient
-XAUH has a limited free float, 86% of tokens are held on a single address, while about 9% is available in the Uniswap pool. A test transaction of 2,500 USDT worth of XAUH already incurs a 5% slippage, and a 10,000 USDT transaction a 17% slippage. The liquidity is therefore deemed to be very thin, and a challenge would require multiple rounds to liquidate a large position.
-This means a global minting limit of 100,000 ZCHF seems reasonable for the start given the limited free float available.
-At the full 100,000 ZCHF minting limit, up to 80,000 ZCHF could be withdrawn at a 20% reserve requirement.
 ## Public Information
 Classification: Strong
@@ -40,13 +36,11 @@
 Maximum Drawdown, 96h close-to-close: 12.00%
-A 20% reserve is therefore defensible against historical 96h close-to-close gold-price moves and leaves an additional buffer for challenger rewards, and a potential liquidation delay.
-The underlying exposure is one gram of gold. Gold is materially less volatile than most crypto-native collateral, which supports a lower ordinary market-risk reserve than would be appropriate for crypto-native assets.
 ## Tail Risks
-### Counterparty Risk: Issuer, custody and redemption dependency
 Description: XAUH depends on Herculis as issuer, the custody of the underlying gold, and the operational process linking the token to the physical gold.
@@ -58,9 +52,9 @@
 XAUH is a tokenized wrapper whose value depends on the issuer, custody structure, reserve documentation, redemption process, and market confidence.
-A failure in any of these components could impair the token relative to the underlying gold price. This risk is materially higher than for larger tokenized-gold products with longer operating histories and deeper liquidity. A 1.00% compensation is therefore assigned for issuer, custody, and redemption dependency.
-### Smart Contract Risk: Admin-control risk
 Description: XAUH depends on an upgradeable Ethereum token contract with issuer-admin functionality.
@@ -72,20 +66,22 @@
 The Ethereum token contract is an upgradeable proxy and includes administrative controls. Reviewed functionality indicates controls such as freeze, unfreeze, wipe of frozen addresses, pause, unpause, supply adjustment, supply-controller assignment, asset-protection role assignment, and fee-controller functions.
-Such controls are common for centrally issued RWA tokens, but they introduce dependency on correct administration, secure key management, and predictable issuer behaviour. A contract-level issue, malicious upgrade, compromised admin key, pause, freeze, wipe, or supply-control error could impair transferability, settlement, or liquidation proceeds. A 0.75% compensation is assigned for smart-contract and admin-control risk.
-### Governance Risk: n/a
-Description: No separate governance-risk premium is assigned.
-Probability: n/a
-Severity: n/a
 Compensation: 0%
-XAUH is centrally issued rather than governed by a decentralized protocol. The relevant control risks are captured under counterparty, smart-contract/admin-control, and liquidity risk. No separate governance-risk premium is assigned to avoid double-counting.
 ### Legal Risk: n/a
 Description: No separate legal-risk premium is assigned in the current classification.
@@ -96,12 +92,10 @@
 Compensation: 0%
-Legal and redemption enforceability are relevant for XAUH, especially around holder eligibility, redemption rights, transfer restrictions, custody claims, and whether an auction buyer can reliably receive, hold, transfer, or redeem XAUH.
-For the current parameter set, this risk is treated as part of the issuer, custody, and redemption dependency rather than as a separate premium. If the legal terms create additional restrictions for ordinary auction buyers, the parameters should be reassessed.
-### Liquidity Risk: Thin Ethereum liquidity and concentrated holder base
 Description: Ethereum XAUH liquidity is limited, and the holder base currently very concentrated.
 Probability: Medium
@@ -110,9 +104,9 @@
 Compensation: 1.00%
-The practical Ethereum liquidity source is currently the Uniswap pool. TON and TRON liquidity cannot currently be treated as immediately available for Ethereum liquidations. The issuer has also indicated that bridging is not yet possible for users and primarily available to the issuer.
-This means that a Frankencoin liquidation could face meaningful slippage, execution delay, or dependence on a small buyer universe. The 48h auction duration is therefore appropriate. A 1.00% compensation is assigned for liquidity risk.
 ### Contagion Risk: n/a
@@ -128,8 +122,8 @@
 ## Conclusion
-The proposed retained reserve of 20% is appropriate relative to the observed 12.00% worst 96h close-to-close gold drawdown and leaves a substantial buffer for liquidation execution. It should not be interpreted as protection against issuer, custody, redemption, admin-control, or liquidity tail risks. Those risks are addressed primarily through the proposed 100,000 ZCHF global minting limit and the 2.75% target interest rate.
-The target interest rate of 2.5% is justified by the selected risk premia: 1.00% for issuer, custody, and redemption dependency, 0.5% for smart-contract and admin-control risk, and 1.00% for thin Ethereum liquidity and holder concentration.
-The proposed 100,000 ZCHF global minting limit is the primary safeguard as long as the free float of the token is so limited. The issuer has however indicated plans of growing the Ethereum version with additional integrations and CEX listings. A higher global minting limit should then be possible.

 The underlying RWA exposure is gold, which is a high-quality collateral asset with low expected market volatility.
+XAUH, however, is a tokenized-gold wrapper with a limited track record. Therefore, an initial global minting limit of ZCHF 250,000 and an interest rate of 2.5% are applied to contain the exposure and compensate FPS holders for the associated tail risks.
 ## Introduction
+XAUH is an ERC-20 token that gives holders exposure to physical gold. Herculis describes the asset as backed by Swiss-stored, insured, and audited LBMA 999.9 gold, with regular custody attestation by KPMG Switzerland. XAUH also exists on other networks, including TON and TRON. From 500 XAUH, physical redemptions are possible for KYC-ed holders at a 3% redemption fee plus applicable transportation and insurance costs.
+Herculis Tokens SA is incorporated in Panama as a subsidiary of Herculis Group, a Swiss Wealth Management & Asset Protection boutique founded in 2009, and aims to offer a more transparent and secure way for investors to participate in the gold market without the frictions typically associated with traditional gold investments.
 ## Free Float/Liquidity
 Classification: Sufficient
+XAUH currently has a highly concentrated holder distribution on Ethereum: around 86% of supply is held in a single issuer-controlled address, while roughly 9% sits in the Uniswap pool. However, Herculis plans to expand Uniswap liquidity, add Ethereum XAUH support to the existing Biconomy and BTSE listings, and integrate Ethereum XAUH with its live merchant/on-ramp integrations such as ChangeNOW, Changelly and Wert. The holder distribution is expected to improve as soon as these listings and integrations are finalised.
+Importantly, XAUH also has a documented primary-market minting mechanism. KYC-approved customers can request new issuance either by contributing eligible physical gold or by transferring FIAT for newly issued XAUH. The free float is therefore considered sufficient for now, and is expected to become stronger when the planned listings and integrations are finalised.
 ## Public Information
 Classification: Strong
 Maximum Drawdown, 96h close-to-close: 12.00%
+To account for ordinary gold-price volatility over 96h, the 2% challenger reward, and applying an additional haircut for liquidation costs and potential time delays, a 25% minter reserve appears appropriate.
 ## Tail Risks
+### Counterparty Risk: Herculis Group
 Description: XAUH depends on Herculis as issuer, the custody of the underlying gold, and the operational process linking the token to the physical gold.
 XAUH is a tokenized wrapper whose value depends on the issuer, custody structure, reserve documentation, redemption process, and market confidence.
+A failure in any of these components could impair the token relative to the underlying gold price. This risk is higher than for larger tokenized-gold products with longer operating histories, and the token could depeg more significantly from the underlying gold price in such a scenario. A 1.00% compensation is therefore assigned for issuer, custody, and redemption dependency.
+### Smart Contract Risk: Smart-Contract Exploit
 Description: XAUH depends on an upgradeable Ethereum token contract with issuer-admin functionality.
 The Ethereum token contract is an upgradeable proxy and includes administrative controls. Reviewed functionality indicates controls such as freeze, unfreeze, wipe of frozen addresses, pause, unpause, supply adjustment, supply-controller assignment, asset-protection role assignment, and fee-controller functions.
+Such controls are common for centrally issued RWA tokens, but they introduce dependency on correct administration, secure key management, and predictable issuer behaviour. A contract-level issue, malicious upgrade, compromised admin key, pause, freeze, wipe, or supply-control error could impair transferability, settlement, or liquidation proceeds. A 0.5% compensation is assigned for smart-contract risk.
+### Governance Risk: Issuer/admin-control and custody intervention risk
+Description: XAUH is a centrally issued tokenized commodity and thus carries issuer-admin, address-blocking, and government intervention risk.
+Probability: Low
+Severity: Severe
 Compensation: 0%
+XAUH is centrally issued and backed by physical gold held in custody. The token contract includes address-level blocking controls, including functions to add or remove addresses from a blocked list, check whether an address is blocked, and destroy funds held by a blocked address.
+Because the underlying gold is stored physically in identifiable custody arrangements, legal, regulatory, or administrative intervention could also impair redemption, secondary-market confidence, or the economic link between XAUH and physical gold. This is captured under governance/admin-control risk for consistency with other tokenized off-chain assets. A 0.50% compensation is assigned for this residual risk.
 ### Legal Risk: n/a
 Description: No separate legal-risk premium is assigned in the current classification.
 Compensation: 0%
+Legal and operational considerations are mainly captured through counterparty/custody risk and governance/admin-control risk. No additional standalone legal-risk premium is assigned to avoid double-counting.
+### Liquidity Risk: Secondary Market Liquidity & Minting/Redemption Impairment
 Description: Ethereum XAUH liquidity is limited, and the holder base currently very concentrated.
 Probability: Medium
 Compensation: 1.00%
+The practical Ethereum liquidity source is currently the Uniswap pool as well as the direct minting/redemption path.
+This means that a Frankencoin liquidation could face a meaningful discount, as arbitrageurs would apply a haircut due to the limited possibility to sell the tokens on Uniswaps and additional costs for primary market redemptions. A 1.00% compensation is assigned for liquidity risk.
 ### Contagion Risk: n/a
 ## Conclusion
+The proposed retained reserve of 25% is appropriate relative to expected market volatilty of the underlying gold exposure, and leaves a substantial buffer for liquidation execution. It should not be interpreted as protection against issuer, custody, redemption, admin-control, or liquidity tail risks. Those risks are addressed primarily through the proposed 250,000 ZCHF global minting limit and the 2.5% target interest rate.
+The target interest rate of 2.5% is justified by the selected risk premia: 1.00% for issuer, custody, and redemption dependency, 0.5% for smart-contract and admin-control risk, 0.5% for governance risks, and 0.5% for liquidity risk as described.
+The proposed 250,000 ZCHF global minting limit is the primary safeguard as long as the free float and liquidity of the token are limited. The issuer has however indicated plans of growing the Ethereum version with additional integrations and CEX listings. A higher global minting limit should then be possible.

assessments/draft/{XAUH.md@14bc276 → XAUH.md@825d268} RENAMED Viewed

@@ -6,26 +6,22 @@
 The underlying RWA exposure is gold, which is a high-quality collateral asset with low expected market volatility.
-A conservative global minting limit of ZCHF 250,000 and an interest rate of 2.5% are however required to address XAUH's nature as a tokenized-gold wrapper with issuer, custody, redemption, admin-control risk, and limited liquidity.
+XAUH, however, is a tokenized-gold wrapper with a limited track record. Therefore, an initial global minting limit of ZCHF 250,000 and an interest rate of 2.5% are applied to contain the exposure and compensate FPS holders for the associated tail risks.
 ## Introduction
-XAUH is an ERC-20 token that gives holders exposure to physical gold. The issuer describes the asset as backed by Swiss-stored, insured, and audited LBMA 999.9 gold, with regular audit reports by KPMG. XAUH also exists on other networks, including TON and TRON.
+XAUH is an ERC-20 token that gives holders exposure to physical gold. Herculis describes the asset as backed by Swiss-stored, insured, and audited LBMA 999.9 gold, with regular custody attestation by KPMG Switzerland. XAUH also exists on other networks, including TON and TRON. From 500 XAUH, physical redemptions are possible for KYC-ed holders at a 3% redemption fee plus applicable transportation and insurance costs.
-The relevant collateral exposure for Frankencoin is the Ethereum version of XAUH. Liquidity, redemption, transferability, and liquidation feasibility must therefore be assessed on the Ethereum token itself. Liquidity on TON, TRON, or other networks should not currently be counted toward Ethereum liquidation depth unless reliable cross-chain conversion is available to ordinary market participants.
+Herculis Tokens SA is incorporated in Panama as a subsidiary of Herculis Group, a Swiss Wealth Management & Asset Protection boutique founded in 2009, and aims to offer a more transparent and secure way for investors to participate in the gold market without the frictions typically associated with traditional gold investments.
-The primary liquidity therefore arises from the XAUH/USDT Uniswap pool, until the listings on BTSE and Biconomy also include the Ethereum token version (currently, only TON & TRON are available).
 ## Free Float/Liquidity
 Classification: Sufficient
-XAUH has a limited free float, 86% of tokens are held on a single address, while about 9% is available in the Uniswap pool. A test transaction of 2,500 USDT worth of XAUH already incurs a 5% slippage, and a 10,000 USDT transaction a 17% slippage. The liquidity is therefore deemed to be very thin, and a challenge would require multiple rounds to liquidate a large position.
+XAUH currently has a highly concentrated holder distribution on Ethereum: around 86% of supply is held in a single issuer-controlled address, while roughly 9% sits in the Uniswap pool. However, Herculis plans to expand Uniswap liquidity, add Ethereum XAUH support to the existing Biconomy and BTSE listings, and integrate Ethereum XAUH with its live merchant/on-ramp integrations such as ChangeNOW, Changelly and Wert. The holder distribution is expected to improve as soon as these listings and integrations are finalised.
-This means a global minting limit of 100,000 ZCHF seems reasonable for the start given the limited free float available.
+Importantly, XAUH also has a documented primary-market minting mechanism. KYC-approved customers can request new issuance either by contributing eligible physical gold or by transferring FIAT for newly issued XAUH. The free float is therefore considered sufficient for now, and is expected to become stronger when the planned listings and integrations are finalised.
-At the full 100,000 ZCHF minting limit, up to 80,000 ZCHF could be withdrawn at a 20% reserve requirement.
 ## Public Information
 Classification: Strong
@@ -40,13 +36,11 @@
 Maximum Drawdown, 96h close-to-close: 12.00%
-A 20% reserve is therefore defensible against historical 96h close-to-close gold-price moves and leaves an additional buffer for challenger rewards, and a potential liquidation delay.
+To account for ordinary gold-price volatility over 96h, the 2% challenger reward, and applying an additional haircut for liquidation costs and potential time delays, a 25% minter reserve appears appropriate.
-The underlying exposure is one gram of gold. Gold is materially less volatile than most crypto-native collateral, which supports a lower ordinary market-risk reserve than would be appropriate for crypto-native assets.
 ## Tail Risks
-### Counterparty Risk: Issuer, custody and redemption dependency
+### Counterparty Risk: Herculis Group
 Description: XAUH depends on Herculis as issuer, the custody of the underlying gold, and the operational process linking the token to the physical gold.
@@ -58,9 +52,9 @@
 XAUH is a tokenized wrapper whose value depends on the issuer, custody structure, reserve documentation, redemption process, and market confidence.
-A failure in any of these components could impair the token relative to the underlying gold price. This risk is materially higher than for larger tokenized-gold products with longer operating histories and deeper liquidity. A 1.00% compensation is therefore assigned for issuer, custody, and redemption dependency.
+A failure in any of these components could impair the token relative to the underlying gold price. This risk is higher than for larger tokenized-gold products with longer operating histories, and the token could depeg more significantly from the underlying gold price in such a scenario. A 1.00% compensation is therefore assigned for issuer, custody, and redemption dependency.
-### Smart Contract Risk: Admin-control risk
+### Smart Contract Risk: Smart-Contract Exploit
 Description: XAUH depends on an upgradeable Ethereum token contract with issuer-admin functionality.
@@ -72,20 +66,22 @@
 The Ethereum token contract is an upgradeable proxy and includes administrative controls. Reviewed functionality indicates controls such as freeze, unfreeze, wipe of frozen addresses, pause, unpause, supply adjustment, supply-controller assignment, asset-protection role assignment, and fee-controller functions.
-Such controls are common for centrally issued RWA tokens, but they introduce dependency on correct administration, secure key management, and predictable issuer behaviour. A contract-level issue, malicious upgrade, compromised admin key, pause, freeze, wipe, or supply-control error could impair transferability, settlement, or liquidation proceeds. A 0.75% compensation is assigned for smart-contract and admin-control risk.
+Such controls are common for centrally issued RWA tokens, but they introduce dependency on correct administration, secure key management, and predictable issuer behaviour. A contract-level issue, malicious upgrade, compromised admin key, pause, freeze, wipe, or supply-control error could impair transferability, settlement, or liquidation proceeds. A 0.5% compensation is assigned for smart-contract risk.
-### Governance Risk: n/a
+### Governance Risk: Issuer/admin-control and custody intervention risk
-Description: No separate governance-risk premium is assigned.
+Description: XAUH is a centrally issued tokenized commodity and thus carries issuer-admin, address-blocking, and government intervention risk.
-Probability: n/a
+Probability: Low
-Severity: n/a
+Severity: Severe
 Compensation: 0%
-XAUH is centrally issued rather than governed by a decentralized protocol. The relevant control risks are captured under counterparty, smart-contract/admin-control, and liquidity risk. No separate governance-risk premium is assigned to avoid double-counting.
+XAUH is centrally issued and backed by physical gold held in custody. The token contract includes address-level blocking controls, including functions to add or remove addresses from a blocked list, check whether an address is blocked, and destroy funds held by a blocked address.
+Because the underlying gold is stored physically in identifiable custody arrangements, legal, regulatory, or administrative intervention could also impair redemption, secondary-market confidence, or the economic link between XAUH and physical gold. This is captured under governance/admin-control risk for consistency with other tokenized off-chain assets. A 0.50% compensation is assigned for this residual risk.
 ### Legal Risk: n/a
 Description: No separate legal-risk premium is assigned in the current classification.
@@ -96,12 +92,10 @@
 Compensation: 0%
-Legal and redemption enforceability are relevant for XAUH, especially around holder eligibility, redemption rights, transfer restrictions, custody claims, and whether an auction buyer can reliably receive, hold, transfer, or redeem XAUH.
+Legal and operational considerations are mainly captured through counterparty/custody risk and governance/admin-control risk. No additional standalone legal-risk premium is assigned to avoid double-counting.
-For the current parameter set, this risk is treated as part of the issuer, custody, and redemption dependency rather than as a separate premium. If the legal terms create additional restrictions for ordinary auction buyers, the parameters should be reassessed.
+### Liquidity Risk: Secondary Market Liquidity & Minting/Redemption Impairment
-### Liquidity Risk: Thin Ethereum liquidity and concentrated holder base
 Description: Ethereum XAUH liquidity is limited, and the holder base currently very concentrated.
 Probability: Medium
@@ -110,9 +104,9 @@
 Compensation: 1.00%
-The practical Ethereum liquidity source is currently the Uniswap pool. TON and TRON liquidity cannot currently be treated as immediately available for Ethereum liquidations. The issuer has also indicated that bridging is not yet possible for users and primarily available to the issuer.
+The practical Ethereum liquidity source is currently the Uniswap pool as well as the direct minting/redemption path.
-This means that a Frankencoin liquidation could face meaningful slippage, execution delay, or dependence on a small buyer universe. The 48h auction duration is therefore appropriate. A 1.00% compensation is assigned for liquidity risk.
+This means that a Frankencoin liquidation could face a meaningful discount, as arbitrageurs would apply a haircut due to the limited possibility to sell the tokens on Uniswaps and additional costs for primary market redemptions. A 1.00% compensation is assigned for liquidity risk.
 ### Contagion Risk: n/a
@@ -128,8 +122,8 @@
 ## Conclusion
-The proposed retained reserve of 20% is appropriate relative to the observed 12.00% worst 96h close-to-close gold drawdown and leaves a substantial buffer for liquidation execution. It should not be interpreted as protection against issuer, custody, redemption, admin-control, or liquidity tail risks. Those risks are addressed primarily through the proposed 100,000 ZCHF global minting limit and the 2.75% target interest rate.
+The proposed retained reserve of 25% is appropriate relative to expected market volatilty of the underlying gold exposure, and leaves a substantial buffer for liquidation execution. It should not be interpreted as protection against issuer, custody, redemption, admin-control, or liquidity tail risks. Those risks are addressed primarily through the proposed 250,000 ZCHF global minting limit and the 2.5% target interest rate.
-The target interest rate of 2.5% is justified by the selected risk premia: 1.00% for issuer, custody, and redemption dependency, 0.5% for smart-contract and admin-control risk, and 1.00% for thin Ethereum liquidity and holder concentration.
+The target interest rate of 2.5% is justified by the selected risk premia: 1.00% for issuer, custody, and redemption dependency, 0.5% for smart-contract and admin-control risk, 0.5% for governance risks, and 0.5% for liquidity risk as described.
-The proposed 100,000 ZCHF global minting limit is the primary safeguard as long as the free float of the token is so limited. The issuer has however indicated plans of growing the Ethereum version with additional integrations and CEX listings. A higher global minting limit should then be possible.
+The proposed 250,000 ZCHF global minting limit is the primary safeguard as long as the free float and liquidity of the token are limited. The issuer has however indicated plans of growing the Ethereum version with additional integrations and CEX listings. A higher global minting limit should then be possible.