JP Thieriot, co-founder and CEO of Energy Substantiation, revealed that the company is currently developing tokens for natural gas and Brent crude. He expects a diverse range of users to gravitate toward these assets, from energy buyers looking to hedge their future costs to investors seeking direct exposure to energy prices without the complexities of the futures market. Perhaps most importantly, Thieriot sees a major opportunity for energy suppliers who need flexible working capital.
"We predict that oil tokens could account for a quarter of the global oil market within ten years," Thieriot stated. He emphasized that for commodities that are "continuously in motion"—unlike gold, which can sit in a vault for decades—the requirements for success are much higher. For an energy token to be viable, it must be backed by verifiable inventory, supported by workable custody solutions, and capable of near-instant settlement.
The executives involved in these projects differ slightly on how quickly the energy sector can catch up to precious metals. Theo’s Iggy Ioppe argued that the inherent difficulties of storage and transport make it significantly harder to build income-generating tokens for energy compared to metals. In the world of silver and gold, "leasing" the metal to a jeweler or an industrial user is a well-understood process. In the energy world, the "productive" use of the asset often involves consuming it, which requires a different approach to tokenization and inventory replacement.
Despite these hurdles, the consensus among industry leaders is that the transition is inevitable. The expansion of the market will ultimately depend on two factors: the ability to connect digital tokens to reliable, real-world physical markets and the ability to provide owners with a compelling reason to hold them beyond simple price speculation.
As the market cap for these assets continues to climb, the distinction between "crypto" and "traditional finance" continues to blur. The move toward lending and energy indicates that tokenization is moving past its proof-of-concept phase. By integrating physical inventory with the speed and transparency of blockchain networks, companies like Paxos, Theo, and Energy Substantiation are attempting to build a more efficient, accessible, and productive global commodities market. Whether these digital representations can truly capture 25% of the global oil market or reach a $100 billion valuation remains to be seen, but the current momentum suggests that the era of "static" commodity ownership is rapidly coming to an end.
