FinanceBlockchain finance platform Theo has launched a tokenized silver product called thSLVR, which is backed by over $40 million in active leases.
The thSLVR Token Provides Silver Exposure and Income
According to the company, thSLVR enables investors to maintain exposure to silver while also generating income through the lending of the metal to institutional clients.
Typically, refiners, mints, and industrial manufacturers borrow silver to fulfill production requirements without bearing the risk of price fluctuations. These borrowers pay a leasing fee and subsequently return an equivalent amount of silver. Traditionally, the income generated from these leases has gone to bullion banks and dealers instead of to individual investors holding silver via exchange-traded funds (ETFs) or other means.
This year, silver prices have seen dramatic fluctuations, reaching a peak of $121.79 per ounce in January before plummeting by 41% within three days. The metal traded as low as $54.74 in July but has struggled to recover, currently trading around the mid-$60s, about half of its January high.
These price movements have been linked to changing interest rate expectations, speculative trading activity, and uncertainty regarding industrial demand.
Onchain Lease Income
Theo stated that the silver associated with thSLVR will be leased to well-established institutional parties under standard market conditions, with credit risk mitigated by a parent-company guarantee. Token holders will benefit from price movements in silver while also receiving leasing income.
The product has launched with more than $40 million in committed leases. Initially, thSLVR will be available in beta to institutions and selected investors, with plans for broader availability in the future.
The market for tokenized silver is still significantly smaller than that for tokenized gold, which has developed into a multi-billion-dollar market across various offerings. Existing silver tokens that offer returns typically derive their payouts from a portion of platform trading fees rather than income from lending the actual metal.
Growth of Tokenized Commodities
The market for tokenized real-world assets has rapidly expanded beyond U.S. Treasuries and private credit into equities, funds, and commodities. Currently, tokenized commodities are valued at approximately $4.9 billion across 130 different products, with gold-backed tokens from Tether and Paxos leading the way. The number of holders of commodity tokens has increased by 13% over the past month, reaching nearly 339,000, as reported by RWA.xyz.
Lease rates for silver can increase sharply during times of low physical availability. Approximately 83% of the silver stored in London vaults is tied up in physically backed investment products, leaving around 136 million ounces available for trading and leasing, according to data cited by Theo.
In October 2025, London’s one-month silver lease rate briefly surged to about 39%, in stark contrast to a historical average of below 1%. Although rates have since stabilized, the market is anticipated to experience a sixth consecutive annual supply deficit in 2026, with the shortfall projected at 46.3 million ounces.
“Silver is moving towards its sixth consecutive year of supply deficit, and the amount of lendable silver in London is nearing record lows,” remarked Iggy Ioppe, chief investment officer of Theo, in an email statement.
“In this scenario, the lease rate is the true indicator, not the spot price, and it has been highly volatile. thSLVR introduces the economics of silver lending to the blockchain, and when the market tightens, the value of that income becomes particularly evident,” he added.
Established by former traders from Optiver and IMC, Theo also provides yield-bearing tokenized gold and U.S. Treasury products. The introduction of silver leases will enhance the asset base supporting thUSD, its yield-bearing stablecoin, which utilizes a hedged metals-lending strategy aimed at generating returns irrespective of commodity price trends.
Read more: FCA considers exempting tokenized gold from fund rules to defend London market
CommoditiesTokenizationExclusiveAI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.Latest Crypto News- 1Crypto Long & Short: Six signs a crypto winter is ending1 min ago
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