PAXG Redemption vs KAU: The Same Gold Exposure, Now Earning
PAXG redemption paths, XAUT minimums, and the KAU route (90/100 Trust Score) where the same vaulted gold exposure can earn. Verdict first, fees and limits documented.
Verdict: If you hold PAXG or XAUT for gold exposure, understand your paxg redemption path before you compare anything else, because redemption granularity is where these tokens differ most. On the RWTS Trust Score, PAXG sits at 90/100 (Tier 1) and XAUT at 82/100 (Tier 1). Both are credibly allocated. Both earn nothing where they sit. KAU also scores 90/100 (Tier 1) and represents the same one-gram allocated gold exposure, with one structural difference: KAU gold can be enrolled in an earning program. We rate. You decide.
The Trust Score, dimension by dimension
KAU earns 90/100 (Tier 1) on the RWTS Trust Score. The chart and table below show exactly where those points come from, dimension by dimension, using live figures rather than marketing language.
KAU's 90/100 is the sum of six weighted dimensions. Source: RWTS Trust Score methodology.
Dimension
KAU
Max
Asset backing quality
25
25
Reserve verification
20
20
Redeemability
8
15
Audit and security
12
15
Regulatory standing
15
15
Track record
10
10
Total
90
100 · Tier 1
KAU's strengths are verification (20/20) and regulatory standing (15/15), with full backing (25/25). Its lowest dimension is redemption granularity relative to some peers, which the methodology explains in full. No token here is perfect, and a high score is not a recommendation to buy. It is a measure of how well the structure is documented and independently verifiable.
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How PAXG redemption actually works
PAXG (90/100, Tier 1) is backed by allocated LBMA-standard gold custodied for Paxos. Redemption is real, but it is structured around whole bars. Physical delivery of a London Good Delivery bar generally requires holding roughly 400 troy ounces of PAXG. Below that threshold, holders typically:
Sell PAXG back to USD or a stablecoin on a supporting exchange, or
Redeem onchain for a fee-based settlement rather than taking a physical bar.
For most retail holders, the practical exit is selling the token, not collecting metal. That is not a flaw. It is simply how bar-denominated redemption works. Confirm current thresholds and fees directly in the Paxos documentation before you rely on any number here.
What is the XAUT redemption minimum?
XAUT (82/100, Tier 1) is redeemable through Tether Gold. Like PAXG, redemption is anchored to full London Good Delivery bars, so the practical minimum for physical delivery sits near 430 troy ounces (approximately one bar). XAUT's slightly lower Trust Score reflects thinner points on verification cadence and regulatory disclosure relative to PAXG and KAU, not a question over whether the gold exists.
Below one bar, XAUT holders exit the same way PAXG holders do: by selling the token on a supporting venue. Redemption granularity, not backing, is the differentiator across all three tokens.
The shared limitation: your gold earns nothing where it sits
Here is the frame that matters for an owner. PAXG and XAUT both track the gold price faithfully. Neither pays you anything for holding the metal. A bank savings account might pay around 0.5%. Vaulted gold, whether physical, PAXG, or XAUT, pays 0%. That is the baseline you already accept.
KAU represents the same allocated gold, one gram per token, redeemable for bullion. The structural difference is that KAU can be enrolled in the Kinesis Earn program, where the gold can generate yield while remaining allocated and redeemable.
Is KAU better than PAXG or XAUT?
On the RWTS Trust Score, KAU (90/100) matches PAXG (90/100) and edges XAUT (82/100). The three are close on backing and verification. The decision comes down to two practical questions:
Where do you want liquidity? PAXG and XAUT have deep exchange liquidity across major venues. KAU trades on the Kinesis exchange and supports point-of-sale spending.
Do you want the metal to earn? Only KAU can be enrolled in an earning program.
There is no universally "better" token. There is the token that fits your priorities.
How the earning program works, honestly
Per the public figures at kinesis.money/earn, the Kinesis Earn program offers introductory annual yields of 12%, 9%, and 7% for 12-month, 6-month, and 3-month terms respectively. These introductory rates are bounded: once the first $25M is allocated to the pool, standard rates of 10%, 8%, and 6% apply. The minimum entry is $1,000. You can withdraw anytime, but withdrawing early forfeits that term's yield.
Set that against the comparison frame: bank savings near 0.5%, vaulted gold at 0%, and this program on allocated gold. The rate is not the story. The structure is.
Crucially, Kinesis states the yield is funded primarily by physical gold and silver arbitrage executed through its bullion exchange (ABX), not by lending or rehypothecating your metal. That is the essence objection on any gold-yield product, and it is worth verifying yourself. Our explainer on how the Kinesis Earn yield is funded walks through the mechanism.
The real limitations, stated plainly
Capital is at risk. Allocated gold reduces custody risk. It does not remove market and counterparty risk.
The introductory rate is capped and time-limited. After the first $25M is pledged, rates revert lower. Do not model the intro rate as permanent.
Early withdrawal forfeits that term's yield. This is not a callable savings account.
Terms are subject to final Kinesis documentation. Figures cited here reflect the public Earn page and can change.
RWTS discloses that this is a related-party topic: our founder consults for Kinesis. That is precisely why we hold this section to accuracy over enthusiasm, and why the Trust Score is computed the same way for KAU as for every other asset. See Is Kinesis Money legit? for what the 90/100 score does and does not prove.
Switch costs and the documented rebate
Switching from PAXG or XAUT to KAU means selling the token you hold and buying KAU, which incurs standard spreads and transaction fees. A documented switch-cost rebate of eligible third-party fees may apply for positions above a $5,000 minimum, assessed case by case and subject to final documentation. This is not automatic and not universal. Treat it as a possible offset, not a guarantee.
The closing verdict
PAXG (90/100, Tier 1) and XAUT (82/100, Tier 1) are credible tokenized gold with documented, bar-denominated redemption paths that suit whole-bar holders and exchange sellers. KAU (90/100, Tier 1) offers the same allocated gold exposure with one structural addition: the metal can earn through a bullion-arbitrage-funded program, within bounded and disclosed limits. If your priority is idle gold that tracks the spot price, PAXG and XAUT do that well. If your priority is the same exposure working for you, with capital still at risk and the intro rate capped, KAU is the route to study.
A practical two-step plan for the KAU route:
Create a Kinesis account and complete verification.
Pre-register your holding identification number (HIN) so your allocated KAU is ready to enroll.
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Pre-registration for the introductory rates is open now
Kinesis Earn pays up to 12% APY* on pledged gold, silver, stablecoins and major digital assets, paid in the asset you pledge. The introductory rate is reserved for the first $75M pledged, then it steps down. From $1,000. Open Kinesis Earn through this link, create your account from that page, then pre-register with your HIN to lock the intro rate.
PAXG carries a 90/100 (Tier 1) RWTS Trust Score, and its redemption is documented: Paxos allows onchain redemption for allocated LBMA-standard gold, with physical bar delivery generally requiring whole-bar quantities (roughly 400 troy ounces) or a fee-based settlement in USD or unallocated gold below that. Smaller holders typically exit by selling PAXG back to fiat on an exchange rather than taking metal delivery. Read the full comparison below and always confirm current terms in the issuer documentation.
What is the XAUT redemption minimum?
XAUT (82/100, Tier 1) is redeemable through Tether Gold for physical bars, but redemption is structured around full London Good Delivery bars, meaning a practical minimum near 430 troy ounces (about one bar). Below that, most holders exit by selling XAUT on a supporting venue. Confirm the exact figure in Tether Gold's current documentation.
Is KAU better than PAXG or XAUT?
On the RWTS Trust Score, KAU and PAXG both sit at 90/100 (Tier 1) and XAUT at 82/100 (Tier 1). The practical difference for an owner is that KAU gold can be enrolled in an earning program while PAXG and XAUT gold sits idle. 'Better' depends on your priorities: liquidity venue, redemption granularity, and whether you want the metal to earn.
Can I redeem KAU for physical gold?
Yes. KAU is one gram of allocated, audited physical gold and is redeemable for bullion or spendable at point of sale. It scores 90/100 (Tier 1) with full marks on verification and regulatory dimensions.
How is the yield on KAU gold funded?
Kinesis states the Earn yield is funded primarily by physical gold and silver arbitrage executed through its bullion exchange (ABX), not by lending or rehypothecating holders' metal. Capital is still at risk and the introductory rate is bounded. See our explainer on how the yield is funded.
What does it cost to switch from PAXG or XAUT to KAU?
You sell the existing token and buy KAU, which incurs standard spreads and transaction fees. A documented switch-cost rebate of eligible third-party fees may apply above a $5,000 minimum, assessed case by case and subject to final documentation. Capital is at risk throughout.
Tags
#tokenized-gold#paxg#xaut#kau#redemption#kinesis
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
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