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\n\t\tOpinions expressed by Entrepreneur contributors are their own.\t<\/p>\n
For most of the last decade, you could build a very large business without ever thinking about the physical world. Software scaled. Capital was cheap. Supply chains mostly worked.<\/p>\n
That\u2019s no longer true.<\/p>\n
If you\u2019re building in AI, energy or anything tied to infrastructure, you\u2019ve probably already run into it: the constraint isn\u2019t code \u2014 it\u2019s materials. Copper doesn\u2019t move fast enough. Permitting takes too long. Supply chains are tighter than people expected.<\/p>\n
And yet, the way we finance and trade those materials hasn\u2019t really evolved.<\/p>\n
That\u2019s where commodity tokenization starts to get interesting \u2014 not as a crypto narrative, but as a way of connecting capital more directly to physical assets.<\/p>\n
At a basic level, it\u2019s simple.<\/p>\n
You take a real-world asset \u2014 say copper in a warehouse, or a stream of future production \u2014 and you create a digital token that represents a claim on it.<\/p>\n
That token can then move in ways the underlying asset can\u2019t:<\/p>\n
People have been doing versions of this for a long time. Gold ETFs are an obvious example. But tokenization pushes it further \u2014 it makes these claims more flexible, more programmable and in theory, more accessible.<\/p>\n
The important thing to understand is that the token itself isn\u2019t the innovation.<\/p>\n
The structure around it is.<\/p>\n
Most tokenization models follow the same rough path, even if they describe it differently.<\/p>\n
First, you need a real asset. That could be:<\/p>\n
Then you need someone credible to stand behind it. A custodian, an operator, an auditor \u2014 someone the market trusts. Without that, the whole thing falls apart pretty quickly.<\/p>\n
From there, a token gets issued that represents some form of claim:<\/p>\n
Once that exists, it can be traded.<\/p>\n
That\u2019s the part people focus on. But in reality, the harder problems are upstream \u2014 verification, custody and enforceability. If those aren\u2019t solved, liquidity doesn\u2019t matter.<\/p>\n
Tokenization has been \u201cthe next thing\u201d for a while. Most of it hasn\u2019t gone anywhere.<\/p>\n
What\u2019s changed is the backdrop.<\/p>\n
First, scarcity is real again. Not in a theoretical sense \u2014 actually real. The energy transition, AI infrastructure, and reindustrialization are all pulling on the same set of materials. And supply is slow to respond.<\/p>\n
Second, capital wants cleaner access. The traditional routes \u2014 futures, equities, private deals \u2014 are either too complex, too indirect or too closed off.<\/p>\n
Third, the tooling is better than it used to be. Not perfect, but better. Custody, settlement and even regulatory clarity are starting to catch up just enough to make this workable in certain niches.<\/p>\n
Put those three together, and tokenization starts to look less like a gimmick and more like a workaround.<\/p>\n
If you\u2019re a founder looking at this space, it\u2019s easy to get pulled into the token itself.<\/p>\n
That\u2019s probably the wrong place to focus.<\/p>\n
The more interesting opportunities are around the edges\u2014where the physical world meets the financial layer.<\/p>\n
A few areas stand out.<\/p>\n
Verification and data<\/b> is a big one. Commodity markets run on trust, but a lot of that trust is still manual and opaque. If you can reliably track inventory, production or shipment in a way that markets believe, that\u2019s valuable on its own\u2014token or not.<\/p>\n
Production-linked structures<\/b> are another. Instead of tokenizing what already exists, you tokenize what\u2019s coming out of the ground. Streams, royalties, offtake agreements. That\u2019s where capital actually meets supply.<\/p>\n
Marketplaces<\/b> are still underdeveloped. Not just trading tokens, but connecting buyers and sellers of real material more instantly. That\u2019s harder than it sounds, but potentially much more meaningful.<\/p>\n
And then there\u2019s corporate use<\/b>. Companies sitting on inventory or exposure could use tokenized structures to unlock liquidity or manage risk more efficiently. That part hasn\u2019t really been built out yet.<\/p>\nWhere this breaks<\/h2>\n
There are still plenty of ways this goes wrong.<\/p>\n
If the underlying asset isn\u2019t what people think it is, the structure collapses. That\u2019s not a technology problem \u2014 it\u2019s a trust problem.<\/p>\n
Regulation is still uneven. Depending on how something is structured, you can quickly end up in securities territory, commodities regulation, or both.<\/p>\n
And liquidity is not guaranteed. Wrapping something in a token doesn\u2019t mean there\u2019s a market for it.<\/p>\n
Probably the biggest issue, though, is that this sits in an uncomfortable middle ground. It\u2019s not purely digital, so it doesn\u2019t scale like software. But it\u2019s not purely physical either, so it requires a different kind of expertise.<\/p>\n
That combination tends to filter people out.<\/p>\n
For a long time, startups avoided anything tied to the physical economy. It was slower, more complex and harder to scale.<\/p>\n
That\u2019s starting to change.<\/p>\n
As constraints show up in the real world, the value shifts toward businesses that can actually navigate those constraints \u2014 whether that\u2019s sourcing, financing, or moving materials.<\/p>\n
Commodity tokenization is one piece of that. Not the whole story, and probably not a clean one. But it\u2019s directionally aligned with where things are going.<\/p>\n
The next wave of large companies won\u2019t all look like traditional tech.<\/p>\n
Some of them will sit in between \u2014 part software, part infrastructure, part finance.<\/p>\n
They\u2019ll understand how commodities actually work. They\u2019ll know where the friction is. And they\u2019ll build systems that move capital and materials more efficiently between each other.<\/p>\n<\/p><\/div>\n
For most of the last decade, you could build a very large business without ever thinking about the physical world. Software scaled. Capital was cheap. Supply chains mostly worked.<\/p>\n
That\u2019s no longer true.<\/p>\n
If you\u2019re building in AI, energy or anything tied to infrastructure, you\u2019ve probably already run into it: the constraint isn\u2019t code \u2014 it\u2019s materials. Copper doesn\u2019t move fast enough. Permitting takes too long. Supply chains are tighter than people expected.<\/p>\n<\/p><\/div>\n