Introducing Touchstone: XAUE Vaults and Lending Markets on Morpho

Vaults Touchstone
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1. Background

A touchstone is the small, dark stone that jewelers and assayers have used for millennia to verify the purity of gold. Touchstone is a Morpho curator built for one job: to be the standard against which gold-collateralized lending is measured on-chain. Every market we curate should pass the test — transparent, conservatively calibrated, and honest about its risk.

Touchstone is curated by XAUE, which is anchored by Antalpha (Nasdaq: ANTA) and Aurelion (Nasdaq: AURE).

Issued by Aurise Foundation, XAUE (XAU-Earn) is an AI-powered yield-bearing gold token built as a Reward Layer for Tether Gold (XAU₮). XAUE is designed to make tokenized gold more productive and composable on-chain by combining XAU₮ exposure, a gold-denominated yield layer, NAV-based accounting, and DeFi composability. XAUE acts as the curator and is solely responsible for all curation decisions, risk management, monitoring, and related operational accountability.

As the first asset supported by Touchstone on Morpho, XAUE enables holders to access liquidity without selling their positions, while generating gold-linked borrowing demand for lenders.

2. Why XAUE on Morpho

Morpho’s architecture is the right home. Reward-bearing gold DeFi utility is yet to develop while Touchstone would like to fill the gap. Isolated markets keep gold risk contained and cleanly legible, no contagion from unrelated assets. The curator model lets domain specialists bring real expertise to a specific asset class, and holds them accountable for it. For a gold-native team, that’s exactly the venue we want: room to do one thing extremely well, in the open.

The initial Morpho deployment will introduce two vaults and two XAUE-backed lending markets:

  • Touchstone USDT Vault: supplies USDT liquidity to the XAUE / USDT market
  • Touchstone XAU₮ Vault: supplies XAU₮ liquidity to the XAUE / XAU₮ market
  • XAUE / USDT Market: allows users to post XAUE as collateral and borrow USDT
  • XAUE / XAU₮ Market: allows users to post XAUE as collateral and borrow XAU₮, supporting leveraged or hedged gold-exposure strategies

Together, these deployments expand XAUE’s utility as on-chain collateral while introducing gold-linked collateral and borrowing demand to the Morpho ecosystem.

3. Curation Principles

The initial deployment follows three core principles:

1.Collateral-specific risk assessment

XAUE markets will be assessed as gold-linked collateral markets. Risk review will consider underlying XAU₮ exposure, NAV mechanics, liquidity depth, redemption mechanics, oracle robustness, and liquidation conditions. Gold has deep global liquidity, low correlation to crypto, and a shallow drawdown profile relative to BTC/ETH. XAUE adopts the Chainlink XAU/USD, priced off a robust, independent reference feed, not a thin on-chain pool.

2.Conservative launch parameters

Initial caps and vault allocations will be sized around gold’s actual behavior, realized volatility, liquidity depth, worst historical drawdowns, with conservative headroom rather than the highest LLTV the market will bear..

3.On-chain transparency

Vault roles, allocations, caps, timelocks, and pending changes will be visible on-chain. Material deployment parameters and market configurations will be disclosed when finalized.

4. Vaults

1. Touchstone USDT Vault

The Touchstone USDT Vault accepts USDT deposits and allocates liquidity to the XAUE / USDT market on Morpho.

Vault yield is expected to come from interest paid by borrowers using XAUE as collateral. In practice, USDT depositors supply liquidity to XAUE / USDT markets, while XAUE holders can borrow USDT without selling their XAUE position.

Key parameters:

  • Vault address (VaultV2): 0xe7765dd0aa5d6346d8a2690fd48f0fcd7da0ec77
  • Vault underlying asset: USDT (0xdAC17F958D2ee523a2206206994597C13D831ec7)
  • Associated market: XAUE/USDT lending market
  • Market ID: 0xd5243ef6e9757a4e546ef7bb160a3ec62a1951aef21448c8413d324c4a438c27
  • Loan asset: USDT (0xdAC17F958D2ee523a2206206994597C13D831ec7)
  • Collateral: XAUE (0xd5D6840ed95F58FAf537865DcA15D5f99195F87a)
  • Oracle: 0x5902CBD043cdb396AF49c9c8D2ad405B28ba8629 (in-house NAV adapter × Chainlink XAU/USD)
  • IRM (interest rate model): AdaptiveCurve (0x870aC11D48B15DB9a138Cf899d20F13F79Ba00BC)
  • Liquidation LTV (LLTV): 77%
  • Owner / Multisig (4/6 Safe): 0xAd4393979Cbb7Dc7BE20a90d2276Ab0af15b9467
  • Curator (3/5 Safe): 0x0324Cd101Ecd78F0667A25668Ef05842c9136Eff
  • Allocator: 0x2e84B80F322b305Ccaaa83eb88A3494447e260D9 (currently a project hot-wallet EOA, to be migrated to a multisig)
  • Sentinel / Guardian: not set
  • Fees: performanceFee = 0, managementFee = 0, feeRecipient unset (fee structure TBD)

2. Touchstone XAU₮ Vault

The Touchstone XAU₮ Vault accepts XAU₮ deposits and allocates liquidity to the XAUE / XAU₮ market on Morpho.

Vault yield is expected to come from interest paid by borrowers using XAUE as collateral. In practice, XAU₮ depositors supply liquidity to XAUE / XAU₮ markets, while XAUE holders can borrow XAU₮ without selling their XAUE position.

Key parameters:

  • Vault address (VaultV2): 0x98B102d24b5D03F8d840843B0C7Dd98d439ac443
  • Vault underlying asset: XAU₮ (0x68749665FF8D2d112Fa859AA293F07A622782F38)
  • Associated market: XAUE / XAU₮ lending market
  • Market ID: 0xf94a9977bf998b162d4f9b741b3241d3bfa07e6c9c7028e4b76f7e8fefda0e8d
  • Loan asset: XAU₮ (0x68749665FF8D2d112Fa859AA293F07A622782F38)
  • Collateral: XAUE (0xd5D6840ed95F58FAf537865DcA15D5f99195F87a)
  • Oracle: 0xEE13455F215977e72b0E9dEd71f72470139955e6 (Morpho ChainlinkV2 oracle built on our in-house NAV adapter 0x5fef13bE491CCb417Ee623905F04B53B6b37Dbfd, pricing XAUE↔XAU₮ by net asset value)
  • IRM (interest rate model): AdaptiveCurve (0x870aC11D48B15DB9a138Cf899d20F13F79Ba00BC)
  • Liquidation LTV (LLTV): 77%
  • Owner / Multisig (4/6 Safe): 0xAd4393979Cbb7Dc7BE20a90d2276Ab0af15b9467
  • Curator (3/5 Safe): 0x0324Cd101Ecd78F0667A25668Ef05842c9136Eff
  • Allocator: 0x2e84B80F322b305Ccaaa83eb88A3494447e260D9 (currently a project hot-wallet EOA, to be migrated to a multisig)
  • Sentinel / Guardian: not set
  • Fees: performanceFee = 0, managementFee = 0, feeRecipient unset (fee structure TBD)

5. Initial Markets

Initial markets are designed to support borrowing demand against XAUE collateral.

1. XAUE / USDT Market

The XAUE / USDT market allows users to:

  • Deposit XAUE as collateral
  • Borrow USDT against it under an LLTV of 77%
  • Access stablecoin liquidity without selling XAUE
  • Generate USDT lending demand for the XAUE USDT Main Vault

This market is intended to serve as the primary stablecoin liquidity layer for XAUE on Morpho. Borrower-paid interest from XAUE-backed positions generates lending yield for USDT suppliers to the market.

2.XAUE / XAU₮ Market

The XAUE / XAU₮ market allows users to:

  • Deposit XAUE as collateral
  • Borrow XAU₮ against it under an LLTV of 77%
  • Access XAU₮-denominated liquidity without exiting XAUE exposure
  • Support a native liquidity link between XAUE and XAU₮

This market is intended to create a gold-native borrowing layer for XAUE holders. It enables users to borrow XAU₮ against XAUE collateral, supporting more flexible allocation, liquidity, and redemption-related use cases within the tokenized gold ecosystem.

6. Transparency and Timelocks

Vault roles, market allocations, caps, fee settings, timelocks, and pending changes will be visible on-chain and through Morpho interfaces.

Risk-increasing changes, including market onboarding, cap increases, and material parameter updates, will follow the applicable Morpho vault timelock process where required.

Final role assignments, vault addresses, market IDs, oracle addresses, and monitoring resources will be shared before launch.

7. Disclaimer

Touchstone vaults and their underlying XAUE-back markets involve risks, including smart contract, oracle, liquidation, liquidity, market, and regulatory risks. Yields are variable and not guaranteed. Borrowers may be liquidated if their positions breach liquidation thresholds. Depositors are exposed to the risks of the underlying markets selected by the curator.

This post is for informational purposes only and does not constitute investment advice or a recommendation to engage in any transaction.Participation may be subject to jurisdictional and eligibility restrictions.

If you hold tokenized gold and want it to work, if you want stablecoin liquidity against gold collateral, or if you simply want to pressure-test our approach: come talk to us. Rub the gold across the stone. That’s what a Touchstone is for.

8.Resources