Wrapping tea, coffee, spices, crude oil, aluminum, gold, rubber, and more

Friday 24th September 2021

A WRAP Commodity is a blockchain token pegged to or collateralized by a commodity e.g. tea, coffee, spices, crude oil, aluminum, gold, rubber, etc.

A WRAP Commodity is a blockchain token pegged to or collateralized by a commodity e.g. tea, coffee, spices, crude oil, aluminum, gold, rubber, etc.

It’s called a WRAP Commodity because the original asset is put in a "wrapper" or "digital vault" that enables the wrapped version to be traded on a blockchain.

1. Benefits of WRAP Commodities

  • Fractionalized ownership
  • Real-time settlement
  • Programmability
  • Faster transactions
  • Fewer intermediaries
  • Decentralization - users control the token using private keys
  • Enhanced transparency
  • 24 x 7 x 365 trading

If you are a Commodity grower, processor, cooperative, etc. WRAP Commodities enable you to generate interest-free cash flow.

If you are an investor, WRAP Commodities enable you to profit from a virtually infinite buffet of investment opportunities.

2. Wrapped commodities can relate to

  • Agricultural products: Grains, food, and fiber (cocoa, coffee, corn, cotton, fruits, milk, oats, pulses, rapeseed, rice, soybeans, soyabean oil, spices, sugar, tea), Livestock and meat (lean hogs, live cattle, feeder cattle)
  • Energy: Crude oil, Ethanol, Gasoline, Heating oil, Natural gas, Propane
  • Forest products: Lumber, pulp
  • Metals: Industrial (Aluminum, Brass, Cobalt, Copper, Lead, Molybdenum, Nickel, Tin, Zinc), Precious (Gold, Platinum, Palladium, Silver)
  • Others: Palm oil, Rubber, Wool

3. Case study

In July 2021, a first-of-its-kind coffee coin was launched by Brazil’s second-largest Arabica coffee cooperative, Minasul. Coffee Coin is backed by physical stocks of green coffee. The value of each coin is pegged to the market price of green coffee.

Farmers can buy Coffee Coin against their current and projected future coffee output. They can also use Coffee Coins to buy raw materials and other products and services. Investors can buy Coffee Coins and trade them for cash or green coffee in lots of 1,500 kilos.

Coffee Coin is likely to be less volatile as it is pegged to the market price of coffee.