Playbook 05

RWA Strategy

Turn gold into yield with DeFi.

Level
Intermediate
Time
~15 min to set up
Minimum
~$1,000
Risk
Medium

Use tokenized gold (fGLD) as collateral to borrow USDM and amplify gold exposure through a leveraged looping strategy. The Coalition's flagship Real-World Asset playbook.

Prerequisites

Before you start, complete:

Why this playbook exists

Tokenized gold plus a Cardano lending market is a combination that didn’t exist 18 months ago. fGLD gives you programmable, 1:1-backed exposure to physical gold. Fluid lets you use it as productive collateral. Put them together, and one gram of gold can do the work of two or more.

This is the Coalition’s flagship RWA strategy, and it deserves its own playbook because it is genuinely different: you’re leveraging a historically low-volatility asset (gold), in a non-custodial protocol, on a Cardano-native stack that never leaves the chain.

Read the basics first

This is also where first-time DeFi users most often make a mistake. Please read through the prerequisite playbooks above before running this one.

The idea in plain language

You start with fGLD. You supply it as collateral to Fluid. You borrow USDM against it. You use that USDM to buy more fGLD on NBX. You supply the new fGLD as collateral. Repeat.

After a few loops, you hold more fGLD than you started with, but you also have a USDM debt to service. Your position is net long gold, leveraged by the borrowed USDM.

The loop, on one line

fGLD collateral → borrow USDM → swap USDM for fGLD on NBX → back to collateral → repeat

When gold goes up, your leveraged position rises faster than a plain spot holding would. When gold goes down, your position falls faster, and past a certain drawdown, you get liquidated.

What you'll need

  • At least $1,000 of fGLD (around 10+ grams) to start — below this, the buffer is too thin
  • A self-custodial Cardano wallet with USDM for fees
  • An NBX account with KYC and the ability to trade fGLD
  • Risk tolerance for a position that can be liquidated in a sharp gold drawdown
  • Active monitoring — this is not a set-and-forget strategy

Fluid's fGLD-specific mechanics

Fluid has tuned its fGLD market specifically because gold collateral deserves different treatment than volatile crypto. The current parameters:

  • LTV threshold around 90% for gold-specific pools (versus 125% elsewhere)
  • Partial liquidation model — at the threshold, you lose roughly 10% of collateral, not 100%
  • Oracle pricing via Binance / BitMark / PAX Gold-equivalent feeds
  • Non-fractional fGLD — you work in whole grams (one token = one gram)

The partial liquidation design is the main reason this strategy is feasible at all. Most lending markets fully liquidate. Fluid’s fGLD markets are designed so that if you cross the line, you keep most of your gold — you just pay a penalty.

The strategy — two modes

Easy mode (recommended for first-timers)

Do one loop, conservatively sized.

  1. Buy ~$1,000 of fGLD on NBX with USDM.
  2. Withdraw fGLD to your Cardano wallet.
  3. On app.fluidtokens.com, supply fGLD as collateral.
  4. Borrow USDM at a conservative LTV of 30–40% — well below the protocol limit.
  5. Send borrowed USDM to NBX, swap for more fGLD.
  6. Withdraw new fGLD to your wallet.

You now hold roughly 1.3–1.4× your original gold exposure, with a USDM debt of 30–40% of the collateral’s value. You pay variable borrow interest on the debt. Your upside and downside on gold are both amplified.

Stop here until you are deeply comfortable with how your position moves.

Pro mode (experienced DeFi users only)

Multiple loops — 2 to 3 iterations max.

Repeat the easy-mode cycle 2–3 times. Each additional loop amplifies exposure and reduces your safety buffer. Past 3 loops the marginal gain is small and the liquidation risk is material.

Do not loop past a point where a 15–20% gold drawdown would liquidate you. That is a normal market move, and surviving it is non-negotiable.

Worked example (illustrative only)

You start with 10 fGLD (~$1,000 at $100/gram).

  • Loop 0: Supply 10 fGLD ($1,000). Borrow 350 USDM (35% LTV). Buy 3.5 fGLD. You now hold 3.5 fGLD unstaked + 10 fGLD collateral = 13.5 fGLD total exposure; 350 USDM debt.
  • Loop 1 (optional): Supply the new 3.5 fGLD ($350). Borrow ~$120 more. Buy 1.2 fGLD. Total: ~14.7 fGLD; ~470 USDM debt.
  • Loop 2 (optional): Roughly +0.4 fGLD. Diminishing returns.

Net effect at the end of 2–3 loops: ~1.4–1.5× spot gold exposure, funded by a USDM debt of 40–50% of initial capital.

Monitoring and management

  • Write down your liquidation price on opening. Put it somewhere you will see it.
  • Set a price alert 15–20% above liquidation — this is your “act now” line.
  • Check position weekly minimum; daily in volatile markets.
  • Have a plan for gold drawdowns. Know, in advance, whether you will add collateral or repay debt when the alert hits.

What to do next

Risks & Disclosures

Liquidation risk.
Partial liquidation is a soft landing, not a free pass. You still lose value.
Compounding risk across loops.
Each loop shrinks your safety margin. Respect the diminishing returns past 2–3 loops.
Interest rate risk.
Variable borrow APY. Sustained high rates can erode or invert the strategy.
Oracle risk.
Fluid relies on gold oracle feeds. In extreme market events, oracles can briefly lag and trigger a liquidation cascade.
Smart contract risk.
Audited protocols can still fail. Don't deposit more than you can afford to lose.
Physical redemption is not the point.
This strategy treats fGLD as on-chain collateral. If your goal is to walk out with physical bars, redemption mechanics and minimums apply separately — talk to NBX.
Tax complexity.
Leveraged crypto positions create tax reporting complexity in most jurisdictions. Plan for it.

Full risk disclosures at /risks.

Glossary References

See the Coalition Glossary for: RWA, fGLD, Looping, Leverage, Collateral, LTV, Liquidation, Oracle, Partial liquidation.