Summary
This proposal recommends listing XAUt0 on Neverland’s canonical cross pool on Monad as collateral and as a variable-rate borrowable asset.
XAUt0 would launch directly in the canonical cross pool under conservative caps: a 30 XAUt0 supply cap, a 10 XAUt0 borrow cap, 40% LTV, a 55% liquidation threshold, and a 20% liquidation bonus. The reserve factor and liquidation protocol fee would each be set to 20%, matching cbBTC’s existing configuration. Stable-rate borrowing, flash loans, isolation borrowing, and E-Mode would remain disabled.
These are launch parameters. Within the mandate approved by governance, Neverland’s team and risk partners may recommend gradual adjustments once XAUt0 has a reliable operating history. Routine reserve-parameter changes would proceed through the applicable Risk Timelock (1H). Anything outside that mandate would go back through the governance process.
If this RFC advances to a Neverland Governance Vote (NGV) and is approved, the final listing payload would be reviewed, simulated, and scheduled through Neverland’s Governance Timelock (24H).
Motivation
XAUt0 is the omnichain version of Tether Gold available on Monad. Each XAUt0 represents one XAUt backed by one fine troy ounce of physical gold, with the USDT0/OFT stack moving the asset between supported networks.
Listing XAUt0 would add a gold-linked asset to Neverland and support two complementary uses:
- Holders could supply XAUt0 as collateral and borrow other enabled assets from the canonical market.
- Users could borrow XAUt0 at a variable rate to establish short-gold positions against otherwise eligible collateral.
The canonical cross pool gives users broader collateral and debt routing. We accept the added cross-pool exposure and bound it through low collateral factors, hard token-denominated caps, no E-Mode uplift, and monitoring in both liquidation directions.
Asset and Protocol Details
| Item | Proposed value |
|---|---|
| Network | Monad |
| Asset | XAUt0 |
| Configuration symbol | XAUT0 |
| Underlying token | 0x01bFF41798a0BcF287b996046Ca68b395DbC1071 |
| Decimals | 6 |
| Token model | Transparent upgradeable token using the USDT0/OFT architecture |
| Monad OFT | 0x21cAef8A43163Eea865baeE23b9C2E327696A3bf |
| Ethereum source asset | XAUt |
| Ethereum OFT adapter | 0xb9c2321BB7D0Db468f570D10A424d1Cc8EFd696C |
| Proposed oracle | Chainlink XAU/USD on Monad |
| Oracle source address | 0x61dD33A34E47a181EE02e42eE0546a3DA808f1B4 |
XAUt0 would use Neverland’s canonical nToken implementation and the existing rateStrategyVolatileEasyHigh variable-rate strategy. No new interest-rate strategy or protocol contract upgrade is required.
Market Architecture
XAUt0 would join Neverland’s existing canonical cross pool as a new reserve.
The intended behavior is:
- XAUt0 can be enabled alongside other eligible collateral.
- XAUt0 collateral can support borrowing of any other enabled reserve.
Oracle Path
The proposal uses the native Chainlink XAU/USD feed on Monad. It returns an 8-decimal USD price and is dimensionally compatible with an asset representing one troy ounce of gold. No price adapter is required.
The key limitation is basis risk. Chainlink tracks XAU/USD, while liquidations execute against XAUt0 liquidity on Monad. XAUt0 may trade away from the XAU reference during bridge disruption, issuer action, liquidity withdrawal, market closures, or short squeezes.
Chainlink XAU/USD should be monitored against:
- Executable XAUt0 sell prices.
- Exact-output XAUt0 buy prices.
- Committed Kuru bids and asks.
- An independent XAU/USD reference such as Pyth.
Any future oracle redesign would require further governance review.
Onchain Liquidity and Liquidation Routes
The liquidity figures below are a snapshot. They can change quickly and cannot guarantee future execution.
At the 29 July 2026 assessment snapshot:
- The three material indexed XAUt0 AMM pools represented approximately $176,000 of aggregate TVL.
- The largest indexed pool represented approximately 74% of that TVL, making the aggregate figure concentration-sensitive.
- The Kuru
XAUT_USDCcommitted order book displayed approximately 13 XAUt0 of bids and 14 to 15 XAUt0 of asks during the review window. - Visible orders were cancelable and changed materially during sampling.
Aggregate TVL is a poor proxy for executable liquidation capacity. Concentrated-liquidity ranges, fragmented venues, order cancellation, route availability, and price impact all matter.
The listing creates two distinct liquidation paths:
- XAUt0 used as collateral. A liquidator repays another asset, receives XAUt0, and needs executable bid-side liquidity to sell it. The selected 20% liquidation bonus is intended to leave room for slippage and execution costs.
- XAUt0 used as debt. A liquidator must source XAUt0 to repay the debt and then receives the borrower’s selected collateral. The applicable liquidation bonus comes from the collateral being seized. XAUt0’s own liquidation bonus does not apply to this path.
The 30 XAUt0 supply cap relies on prompt proportional liquidations after gradual price movements, with arbitrage or market-maker liquidity replenishing routes over time. The launch assumes staged liquidations. AMMs alone cannot be expected to clear the entire cap in one maximum-close transaction.
For a max-LTV account using all 30 XAUt0 as sole collateral, a proportional liquidation beginning around health factor 0.95 would remove approximately 3.07 XAUt0 from the user and leave approximately 2.96 XAUt0 for the liquidator to sell after the protocol-fee split. Maximum close-factor batches can be materially larger and require the Kuru book, split routing, keeper inventory, or earlier intervention.
The 10 XAUt0 borrow cap bounds the initial short-gold market. Depending on the account health factor, a cap-sized debt position can require approximately 5 or 10 XAUt0, plus accrued interest, to be sourced in one maximum-close liquidation. Continuing ask-side depth is therefore required from launch.
Risk Analysis and Conservative Launch Rationale
The supporting technical assessment and Nadette’s security analysis support a conditional approval under conservative parameters. The main risks are token control, bridge dependency, basis risk, liquidity, and concentration. Normal gold volatility is secondary.
| Risk area | Analysis | Initial mitigation |
|---|---|---|
| Issuer and administrative control | The token owner can mint, blocklist, redeem, destroy blocked funds, and change the authorized OFT. The transparent proxy can be upgraded. Blocking or confiscating Neverland’s Pool or aToken could interrupt supply, withdrawal, repayment, borrowing, or liquidation. | Bound the initial supplied balance at 30 XAUt0 and the initial XAUt0 debt envelope at 10 XAUt0; monitor owner, ProxyAdmin, implementation, OFT, peer, supply, and blocklist changes. |
| Security and audit scope | The reviewed deployment inherits its security model from the broader USDT0/OFT stack. The security review did not identify an XAUt0-specific audit, and the exact Monad implementation, OFT configuration, and DVN set require final launch verification. | Require bytecode, ownership, peer, DVN, and audit-scope checks before execution. The cited security report provides diligence support and carries no audit assurance. |
| Bridge and redemption | Cross-chain backing and redemption depend on the Ethereum adapter, LayerZero/OFT configuration, issuer access, and larger secondary markets. Small Neverland liquidations cannot rely on direct physical-gold redemption. | Size the reserve using executable secondary-market liquidity; monitor OFT health and maintain approved Monad and cross-venue routes. |
| Oracle and basis risk | The Chainlink source measures XAU/USD while the market trades XAUt0. XAUt0 can decouple from the reference during issuer, bridge, market-hours, or liquidity stress. | Use 40% LTV, 55% liquidation threshold, no E-Mode uplift, and two-sided parity monitoring with defined emergency actions. |
| Bid-side liquidity | Indexed AMM TVL is concentrated and range-dependent; Kuru orders are cancelable. Larger close-factor batches may not clear profitably through AMMs alone. | Cap supply at 30 XAUt0, provide a 20% gross liquidation bonus, test executable routes, and trigger proportional liquidations before positions require maximum batches. |
| Ask-side liquidity | Enabling borrowing creates a separate need to source XAUt0 during rising-gold liquidations. The applicable bonus belongs to the collateral seized from the borrower. | Cap aggregate new XAUt0 debt at 10 XAUt0 and monitor exact-output buys of 1, 5, 10, and 10 XAUt0 plus an interest buffer. |
| Cross-pool and account concentration | Non-isolated XAUt0 can be combined with other collateral, and one account can occupy either launch cap. This creates more composability and more potential concentration than an isolated market. | Keep launch caps and collateral factors low, leave XAUt0 outside E-Mode, and monitor per-account supply, debt, and health-factor concentration. |
At an illustrative XAU price of approximately $4,000:
- 30 XAUt0 represents approximately $120,000 of supplied-asset capacity.
- At 40% LTV, that cap provides approximately $48,000 of initial borrowing power when XAUt0 is the marginal collateral.
- 10 XAUt0 represents approximately $40,000 of configured borrow-cap notional.
Actual dollar debt can exceed approximately $48,000. The listing is non-isolated, users may combine collateral, XAU appreciation changes dollar values, and accrued interest can take existing debt above the token-denominated borrow cap after origination.
The 15-percentage-point gap between LTV and liquidation threshold provides a meaningful price buffer before newly originated max-LTV positions become liquidatable. The 20% gross liquidation bonus gives additional execution room when XAUt0 is seized. Because the 20% liquidation protocol fee applies only to the bonus portion, the liquidator retains an effective 16% bonus. This corresponds to approximately 13.79% break-even sale slippage before gas and swap fees.
These controls keep the 30 XAUt0 supply cap both usable and bounded. At the illustrative price, it provides roughly the desired $50,000 collateral-side borrowing-power envelope, while larger liquidations would require staged execution. The 10 XAUt0 borrow cap creates a meaningful short-gold market within the order-book depth observed during the assessment.
Proposed Initial Parameters
| Parameter | Initial value |
|---|---|
| Collateralized | Yes |
| Borrowable | Yes |
| Supply cap | 30 XAUt0 |
| Borrow cap | 10 XAUt0 |
| Base LTV | 40% |
| Liquidation threshold | 55% |
| Liquidation bonus | 20% |
| Liquidation protocol fee | 20% of bonus portion |
| Reserve factor | 20% |
| Flash loans | Disabled |
| Interest-rate strategy | Existing volatile strategy |
| Seed supply | 0.01 XAUt0 |
| Oracle | Chainlink XAU/USD |
At full 30 XAUt0 supply and 10 XAUt0 borrowing, simple cap-to-cap utilization would be approximately 33.3%. Under rateStrategyVolatileEasyHigh, the modeled variable borrow rate at that utilization is approximately 5.5%. With the 20% reserve factor, the simplified full-cap supplier rate is approximately 1.47%, and treasury accrual is approximately 0.37% of supplied liquidity per year, assuming constant utilization and excluding rounding.
Launch Controls and Implementation Scope
This RFC authorizes:
- Registering the specified XAUt0 underlying token in the canonical market.
- Assigning the specified Chainlink XAU/USD source.
- Initializing the canonical reserve-token implementations.
- Applying the exact initial parameters above.
- Supplying the 0.01 XAUt0 listing seed.
Before scheduling, the final payload should pass configuration review, decoded-calldata review, fork or fresh virtual-network simulation, and the following launch checks:
- Verify the underlying token, decimals, implementation, owner, ProxyAdmin, OFT, peer, and DVN configuration.
- Map the deployed implementation and bridge components to the applicable security-review scope.
- Verify a fresh and functioning Chainlink XAU/USD round.
- Simulate XAUt0 collateral sales of approximately 0.57, 2.97, 9.57, and 20.15 XAUt0.
- Simulate exact-output XAUt0 purchases of 1, 5, 10, and 10 XAUt0 plus an approved interest buffer.
- Include Kuru cancellation and largest-material-AMM outage scenarios.
- Verify both collateral-side and debt-side liquidation behavior.
- Confirm the decoded package does not modify unselected reserves.
- Verify all post-execution reserve, oracle, cap, role, and seed balances.
Any failed maximum-close outage scenario must be recorded in the final risk acceptance and keeper escalation plan. The model depends on timely smaller liquidations before positions require the largest permitted batch.
Alternatives Considered
Launch in an isolated market
An isolated market would lower cross-collateral exposure at a direct cost to capital efficiency and canonical integration. Existing canonical assets are expected to retain adequate liquidation routes, while the 30/10 caps, 40% LTV, 55% threshold, and lack of E-Mode assignment bound XAUt0’s initial exposure. We therefore propose listing it in the canonical pool.
List XAUt0 as collateral but disable borrowing
A collateral-only launch would remove ask-side XAUt0 sourcing risk along with the short-gold use case. We propose enabling borrowing under a 10 XAUt0 cap, giving the market a limited and observable launch envelope.
Use higher caps or collateral factors at launch
Aggregate TVL alone does not support higher values. Current liquidity is fragmented, concentrated, range-dependent, and partly cancelable. We should expand only after observing real demand and successful liquidation execution.
Conclusion
XAUt0 can justify a controlled launch in Neverland’s canonical cross pool with collateral and variable borrowing enabled.
At a $4,000 XAU price, the proposed configuration supports approximately $48,000 of initial collateral-side borrowing power and approximately $40,000 of XAUt0 borrow-cap notional. The 40% LTV, 55% liquidation threshold, 30/10 caps, and disabled isolation borrowing, E-Mode, and flash loans keep that exposure limited.
Community feedback is requested before the proposal is refined for a Neverland Governance Vote.
Security and Risk Assessments
- Nadette / Neverland Security Desk: XAUt0 risk analysis and report
- Nadette: Monad XAUt0 decision memo
- Nadette: Monad XAUt0 evidence appendix
XAUt0, Oracle, and Liquidity
- Official XAUt0 asset page
- Official USDT0/XAUt0 architecture
- Official USDT0 deployment API
- Official USDT0 security documentation
- Tether Gold terms
- Monad XAUt0 token
- Chainlink XAU/USD on Monad
- Pyth sponsored EVM feeds
- GeckoTerminal XAUt0 pools
- DexScreener XAUt0 pairs
- Kuru order-book depth documentation
- Kuru XAUT_USDC committed depth