Thank you for standing by. My name is Morgan, and I will be your conference operator today. At this time, I would like to welcome everyone to the StreamX Q2 26 business and quarterly update call. All lines have been placed on mute to prevent any background noise. If you would like to ask a web question, please type your question into the Q&A box. Thank you. I would now like to turn the call over to Adele Carey, senior vice president of Alliance Advisors IR. Please go ahead.
Great. Thank you so much, Morgan, and good afternoon, everyone. Welcome to StreamX Corp. Second Quarter 26 Earnings and Corporate Update Call. I am joined today by Karl Henry McPhie, Co-Founder and Chief Executive Officer, and Christine Plummer, Chief Financial Officer. Before we begin, I would like to remind everyone that today's call will contain forward-looking statements based on our current expectations and assumptions. These statements are subject to risks and uncertainties that could cause actual results to differ from those expressed today. Please refer to the cautionary language on slide 2 and 3 of today's presentation, as well as the risk factors detailed in our most recent filings, Form 10-K and Form 10-Q filed with the SEC. The team will also reference certain non-GAAP financial measures during this call. Reconciliations to the most directly comparable GAAP measures are available in our filings and in the appendix to today's deck. And now I am more than happy to turn the call over to Karl Henry McPhie.
Thanks, Adele, and thank you, everyone, for joining us. I am super excited to be able to get into it. In the first quarter, we proved the product. In the second quarter, we built the distribution around what will be recorded: five partnerships that between them give an institution a way in, a way to verify what they own, and a way to custody it, and a way out. What is not yet followed is scale and assets. GLDY assets outstanding were broadly unchanged in the second quarter, and I am going to spend real time today on why, what we are seeing from the market and why we think the next phase looks very different from this. I am also going to spend some time introducing GLDC because it is the most commercially significant thing that we have built. It opens up the product to everyone and adds an entirely new revenue line for the company. Before we start, I would ask you to review our disclosures, which are on the screen and in our filings.
As stated by Adele, today's presentation and our remarks contain forward-looking statements. Again, please review our disclosures here. Past performance is not indicative of future results and any comparisons given throughout the presentation are there to explain the difference in structure, not to project a return. Okay. Now getting into it. The shape of the call: Christine will start by taking you through the second quarter results, the balance sheet, the liquidity, cash runway and capital structure. Then I will come back in and cover four things: what we built this quarter, where GLDY stands and how institutional adoption happens in this category, GLDC and what it means for our revenue, and the market that we are building into. I will finish this with the specific things to hold us to over the next 90 days and then we will take questions. We collected questions submitted ahead of this call.
Most of them are answered inside these sections, but we will also be taking live questions during the Q&A period at the end. So sixty seconds of context before we get started because some people are new to the story and because we still routinely are misfiled on some sites. First, StreamX is a financial technology company. We built and we operate a tokenization platform for commodity capital markets. And we are the issuer of the assets on it, which means the economics stay with us rather than being paid away to a third-party platform. We built the legal structure, the ecosystem, and independent attestation framework before we scaled, not after. We are not a cryptocurrency company. We are not a gold ETF. GLDY is a tokenized security with a yield mechanism. We are not a mining or royalty company. We take no exploration or resource risk. And we are not a single product story. Gold is the first commercial proof of a platform designed to be repeated.
We are NASDAQ listed with no debt, $41.8 million of total liquidity at June 30, a product live and selling since February, and a note on the last line on the left of this page: this is a recurring revenue platform. Revenue scales with asset growth and with trading volume. With that, over to you, Christine.
You, Henry, and good afternoon, everyone. I will start with the headlines on this page, then take you through the detail. I will spend most of my time on liquidity, because that is where the questions were. Four things on this page. We recognized our first income: $100 thousand of gold lease income, the first income earned under the tokenized gold platform. Operating expenses came down by $20.4 million, or 57.1 percent, against the first quarter. Net loss came down by $32.2 million, or 69 percent on the same basis. And the balance sheet stayed strong: debt free, a $41.8 million liquidity position, $32.8 million of working capital, and a net decrease in cash of $14.7 million across the first half. Just one note on the period comparison, because it runs through this whole section. We are comparing the second quarter with the first quarter of 26, not with the prior year quarter. We acquired StreamX Exchange Corporation on May 28, 2025, so the prior year periods contain only about one month of the acquired business and do not give a meaningful basis for comparison.
The prior year comparatives are in the Form 10-Q for anyone who wants them. Moving on to the right of the page, the operating markers. GLDY assets under management of 3.11 thousand ounces as of June 30. External ownership of GLDY up to nine percent, 27.3 ounces of dividends earned with 19.4 ounces paid in the quarter. Our first attestation completed, the partnership ecosystem live across custody, distribution, liquidity, secondary markets, and derivatives. And GLDC expected to launch in the second half. In the second quarter, we recognized $146 thousand of gold lease income. That is the first income in the company's history. I want to be precise rather than promotional about it. Approximately $12 thousand relates to first-quarter income recognized in the second quarter as an immaterial correction, so income earned in the quarter itself was $134 thousand. It is a small number, but what matters is that the mechanism is proven and repeatable.
Loss from operations was $15.2 million in the second quarter, against $35.7 million in the first. Operating expenses came down by $20.4 million or 57.1 percent, driven principally by a lower stock-based compensation charge and lower consulting and platform development costs. Net loss for the quarter was $14.6 million against $46.7 million in the first quarter, a reduction of $32.2 million or 69 percent. Loss per share was $0.08. For the six months, net loss was $61.2 million and the net decrease in cash was $14.7 million. I want to be clear about what is inside that loss because at face value it could be misleading. It includes $32.5 million of noncash stock-based compensation, approximately $12 million of noncash interest, and a $3.1 million loss on extinguishment. The last two both relate to the convertible debt debentures we settled in February, neither of which will recur. The cash cost of running this business is materially lower than the loss line suggests, and that is the bridge into the pages that follow.
The balance sheet is the reason we can focus on growth rather than financing. Total assets of $159.6 million as of June 30 against $173.3 million as of March 31. Total liabilities of $12.4 million, down from $14 million. Total stockholders' equity of $147.1 million, working capital of $32.8 million, and no debt at either date. What moved during the quarter was deliberate. We reduced marketable securities by $10.9 million and redeployed that capital: $6 million to USDC, $5 million of which is expected to be disbursed as the loan to Wintermute. We also funded a $2 million subscription for 2,000 nonvoting shares of MetaLayer Digital Fund 1. We recorded a gold-denominated receivable for in-kind lease yield and contractual revenue share earned in the second quarter but not settled in it. And we entered into a non-cancelable operating lease for office space in Winter Park, Florida, which is what brings the right-of-use asset and the lease liability onto the page.
The objective behind all of that is on the page, and it is straightforward: de-risk the balance sheet, fund growth, and reposition capital towards tokenized commodity infrastructure and the digital asset ecosystem. A number of shareholders asked us to be concrete about liquidity. I am going to give you two numbers rather than one, and tell you why they are different. Our total liquidity position at June 30 was $41.8 million: cash and marketable securities of $18.5 million, digital assets of $6 million, physical gold carried at cost of $15.5 million, and our MetaLayer investment at $1.8 million. Of that, approximately $19.5 million is immediately available today. The difference is three specific disclosed items, and I would rather you hear them from me than derive them from the filings. $5 million of our digital assets is on loan to Wintermute. It is contractually returnable but not until 365 days after the first day of GLDY trading, which was on May 27, 26.
So we do not treat it as available. Our MetaLayer investment is subject to a lockup; the earliest redemption date available to us is 09/30/2026. The physical gold is inventory backing the GLDY reserve. It is a real asset and it is monetizable, but selling it is a capital decision rather than a cash balance. Alongside that, we have working capital of $32.8 million, total equity of $147.1 million and no debt of any kind. We retired $38 billion of convertible notes in February and all related security interest and liens were released. Now moving on to the question that was actually asked: how many years? Our operating cash burn in the second quarter was approximately $1.6 million a month. Within that, we can identify roughly $500 thousand a month of items we do not expect to repeat: accounting and other consulting services, one-time personal cost, and a marketing program that has now run its course.
Stripping those out gives us an expected run rate of approximately $1.1 million a month going into the third quarter. At that run rate, our immediately available funds alone cover approximately 18 months. The total liquidity position covers approximately three years. And it is important to note that this is assuming no revenue, which as you can see, we have begun to generate as of this quarter. So to answer directly: it is years, not months, with no debt and before any of the additional levers available to us. Those levers, none of which are assumed in the figures I have just given: the MetaLayer redemption becomes available at the end of September. We have a stated capital strategy of monetizing portions of the company's GLDY holdings, which we executed on during the first half. And we have engaged an adviser to evaluate strategic alternatives for the PURE EP patent portfolio, where we have not received a definitive offer and therefore assume nothing.
One thing that is not on the slide: we are not managing this business towards the end of a runway. We are managing it toward a fee base, and the operating leverage is genuine. The cost base is largely fixed and built, and the fee streams scale with assets and with turnover. I would now like to address the items on this page. First is share counts, which are presented as of June 30: 112 million common shares outstanding, 69 million exchangeable shares that convert one-for-one, and 182 million fully diluted, including the exchangeable. There are also three items we have been asked about. Share repurchases: on July 1, the board authorized the repurchase of up to 10 million shares at a price not exceeding $2. No shares have been repurchased to date. Timing and execution remain at the Board's discretion and are subject to the trading restrictions that apply to us. I am not going to signal our intentions beyond confirming the authorization is live and the board is actively engaged with it.
Internal controls: the material weaknesses disclosed in our 2025 annual report were not remediated as of June 30. Accordingly, we concluded our disclosure controls and procedures were not effective as of that date. To be clear about what that does and does not mean: this did not result in any identified misstatement and there were no changes to previously released results. Remediation is underway and these items will not be considered fully remediated until the controls have operated for a sufficient period and we have tested them. I expect to report progress each quarter until they are closed. Our auditor: effective July 8, the Audit Committee appointed EisnerAmper, succeeding CBIZ. There were no disagreements on any matter of accounting principles, financial statement disclosure, or auditing scope or procedure. With that, I will hand back to Henry.
Thanks, Christine. So let me start with what we actually did this quarter. Five partnerships and initiatives done since May, and I would ask you to look at them in sequence rather than a list because each one removes a specific reason a potential GLDY investor could not participate. On May 27, Orca, a 24/7 decentralized exchange for tokenized securities with GLDY as the inaugural asset. Compliance enforced automatically at the venue level and a revenue share stream backed to StreamX. That is trading infrastructure. On June 29, Siebert Financial and tZERO. Brokers can now offer GLDY to their clients for trading on an SEC-registered ATS out across approximately $20 billion of network assets. This is the first traditional brokerage channel into the product. On July 1, our independent reserve attestation from EisnerAmper occurred with monthly attestations continuing and an annual audit—this was the single most-requested item in institutional due diligence.
And it is now on track to grow every month. On July 21, Inspira Financial qualified custody for GLDY, so RIAs and wealth managers can hold the asset inside of frameworks that they already operate in. Inspira has $63 billion and more than eight million accounts within its network. On July 23, Wintermute: instant liquidity, 24 hours a day, 365 days a year, with roughly $12 million of ceded liquidity across institutional-grade venues and settlement moved from T+2 to T+0. Have the venue, then the brokerage, then verification, custody, liquidity—that is a complete institutional stack. And six months ago, we had none of it. This is what it adds up to. The strategy here is leverage. We are not trying to acquire investors one at a time. We are enabling brokerages, custodians, and retirement platforms to offer our assets to their own clients, which takes the addressable opportunity from thousands of investors to millions without us having to reach any of them directly.
Everything on this page is live except Equity Trust, which covers U.S. tax-advantaged retirement accounts and is in progress. There is more than 359 thousand accounts and over $72 billion worth of capital. That is a very large pool of gold-allocating capital, and it is still a major channel that is open. With that, I want to address something directly because I think it is the most misunderstood part of our story. There is a perception that buying GLDY requires an investor to have a view on tokenization. That is not the case. It does not, and increasingly, it does not require them to interact with the technology at all. First, through their broker or adviser, an adviser can allocate to GLDY the same way that they would allocate to anything else; through Siebert, it can be reported in the statements their client already receives. The token is an implementation detail they never have to touch.
Second, exposure through swap structures that now gain exposure without holding the token directly removes an operational objection that has gated the largest pools of gold capital. The allocator gets the full economics without having to onboard a new instrument at all. This is especially important for ETFs and hedge funds and is now available. And third, a path that is purely quantitative: the carry. Funds looking for a spread between GLDY and the gold futures funding are buying a return, not a thesis. They do not need a view on tokenized gold as a category at all, which is exactly what makes that useful entry point for us right now. The trader itself gets super-powered by GLDY, adding a 3.5 percent yield to the long leg of the trade and makes it better than anything before. I wrote an article on this that can be found on my X if you want more information on the trade idea. We are in active discussions for allocation across all three of those paths.
And the product the allocator actually buys is straightforward: a gold that pays them a yield, held by a custodian they already trust, tradable around the clock. Everything else is our problem, not theirs. Which brings me to something that we have been investing in pretty heavily and not talked about enough. Corey Handy joined us in May as VP of Product and Design. He had 18 years designing fintech and payment products at PayPal, Microsoft, and DraftKings, and he was the founder and CEO of Kepler Savings. He owns the StreamX experience from end to end. And I want to explain why that is a priority rather than a polish item. Every additional strap between interest and a funded account is a place where an investor stops. For a first-of-its-kind product, that friction compounds because the buyer is already doing something unfamiliar. Reducing it is one of the highest-return uses of engineering time that we have.
So Corey has rebuilt the account opening and accreditation flow with fewer steps between arriving and being verified. He simplified the funding path, added functionality for instant liquidity to allow investors to get in and out of the asset at any time. He has built a clear view of what you own, what it is worth, and every distribution you received in ounces and in dollars. And he is building purpose-built flows for advisers and custodians, which have entirely different requirements from a direct investor. The distribution is built. The experience is what converts it. Now into the GLDY update. On performance, the product has done everything that we said it would. The net asset value has tracked the gold price one-to-one exactly as designed since launch. We have paid four yield distributions, everyone on schedule, and more than 27 ounces distributed to holders in total. And we paid them in gold.
The yield is funded by gold leasing, and we have independent reserve attestation every month with an annual audit and proof-of-reserve Oracle. On assets, we ended the quarter with 3.01 thousand ounces behind GLDY and $30.1 million—3.1 thousand at the end of March—broadly unchanged. I am giving you that analysis deliberately. You will get an ounce count every quarter from here, whichever way it moves. Here is the important point, and the one that I want you to take away: the product is not the constraint. GLDY does everything that we said it would. We believe it remains the best gold asset available anywhere. It is the only one that pays its holders, and the work this quarter was clearing what stands between it and institutional capital. So let me tell you what we have learned about how the capital actually arrives. Institutional allocation to a new asset class does not arrive on a slope.
It arrives in steps. Look at what this category actually looks like. Comparable yield-bearing tokenized products—real products run by serious institutions—have $688 million and $2.25 billion of assets with 56 and 101 holders, respectively. The largest tokenized treasury fund in the world, run by the largest asset manager in the world, has roughly 115 holders. These are products where a very small number of investors move billions of dollars. This is how the market works right now, and it is worth understanding before drawing conclusions from a holder count or quarterly change. There are three things that follow from that. First, Wall Street rewards a fast follower. Allocators are not paid to be the first into the new structure. They are paid to be early into a proven one. That is rational institutional behavior and not a verdict on the asset. Second, our partners are telling us the same thing.
The consistent message that we get back from our brokerage and custody partners, including through the Siebert network, is that a visible institutional allocation is the signal their clients are waiting for. Third, and this is the part that matters: we have spent two quarters removing every reason to wait. Custody, attestation, brokerage access, qualified custody, 24/7 liquidity—those are precisely the things that our allocator points to when they justify going first. And they are now in place. So with all that being said, we expect the first institutional allocation to be an inflection. As this page says, we expect that in the third quarter. In a market that is concentrated, the second and third orders follow much faster than the first, and we are positioned for that. Now into the gate scoreboard. Here is the list: every gate that sits between an announced partnership and funded assets and exactly where we stand against it.
The legal wrapper, physical custody, institutional digital custody, independent attestation, and secondary liquidity are complete. Brokerage access is live through Siebert and tZERO, qualified custody for RIAs and wealth managers is live through Inspira. Three more rows are not marked complete: the US retirement accounts for Equity Trust is in process, our attestation track record is continuing to build and accrues one month at a time, and the accreditation barrier—which is Rule 506(c), excluding most investors from buying—is removed by GLDC. We are also going to republish the scoreboard with every status change at each quarterly update, adding more lines as additional partnerships and integrations go live. Importantly, this lets you measure us against the work done. Now into something that I am especially excited about, GLDC. This is truly the most commercially significant thing that we are building right now.
Each GLDC is backed one-to-one by GLDY or other gold assets, which are backed one-to-one by physical gold. It is permissionless, meaning anyone, anywhere with no minimum, no creation fees, no redemption or transfer fees, and it is issued by an independent Arbitrum foundation. StreamX acts as the servicer to the foundation and is not itself the issuer. We carry monthly attestations from EisnerAmper with GLDY and an annual audit and proof-of-reserve Oracle. There are three reasons why this matters. One: it is one reserve. Every GLDC minted requires a GLDY to be minted behind it. So GLDC assets are GLDY assets. This is not a second product competing with the first. Growth in GLDC is growth in the exact number that you have been watching. Two: it opens the product beyond the credit investors, which is the single largest constraint on our buyer base today. And three: the reserve behind it is productive.
Because that reserve is GLDY, it accrues 3.5 percent through gold leasing. PAX and Tether Gold sit on idle bullion; structurally, they have nothing to be able to fund an ecosystem with. We do. And that changes what we can build when I have a token: a full on-chain ecosystem with borrow-lend markets and deep liquidity. This is the most important part that I want shareholders to understand, because it is an entirely new revenue line for this company and it is not in anyone's model. Walk through it with me. First, someone buys GLDC and capital comes in. A GLDY is then minted behind it, backed one-to-one by physical gold. Because the reserve is GLDY, that reserve is productive. It earns 3.5 percent through gold leasing. And StreamX benefits because GLDC assets drive GLDY assets, which is our base asset on which revenue streams are earned. The reserve income itself accrues to the foundation and pays StreamX a servicing fee and funds the incentives that build out the ecosystem.
Look what that means at scale. At a 3.5 percent reserve rate, $100 million of GLDC is roughly $3.5 million in annual reserve income; $250 million is $8.75 million; $500 million is $17.5 million; and a billion is $35 million. Those figures are illustrative and are not guidance; they are gross of costs and before any amounts are applied to holder incentives or ecosystem programs, but the shape is the point. That model, if it sounds familiar, it should: a stablecoin issuer earns the yield of the reserves that are backing its token and holders are not paid for it. The reserve income is overwhelmingly the majority of a company like Circle's revenue, and it scales with supply at close to zero marginal cost. This is that model with gold in the place of treasuries. And through the servicing agreement with the foundation, service fees accrue on top of the three fee streams that we already earn on every GLDY token issued: the tokenization fee, the annual lease rate fee, and the transfer fee.
It does not replace them. It is additive. Here's how the three sit against one another. GLDC is the only gold token built on a productive reserve. GLDY is the only one paying a yield to holders. We are the only ones with a permissionless gold token backed by yield-bearing reserves. And we are the only ones with no fee to enter or exit on GLDC. And now the bottom row: the incumbents have between 39 and 82 thousand holders and billions in assets. They are much bigger than us today. But look at what they are: tens of thousands of holders, and they pay nothing. Nobody has a yield-bearing gold token and a permissionless one. That gap is the entire opportunity, and these two products together are exactly what we built to close it. Now briefly on silver, because several people asked. In May, we guided to a silver launch in the third quarter. We have moved it to 2027. It was a capital allocation decision: the highest-return use of our engineering capacity and our balance sheet right now is depth on gold, GLDC, and the on-chain functionality around it, not breadth across metals.
And the reason why we can make that choice cheaply is the thing that we have been building all along: the legal wrapper, the custody, the attestation process, and the venue all exist and are proven. Launching silver is now a launch rather than a build project—weeks of work rather than quarters. That optionality is exactly what the platform was designed for. Silver is sequenced. The last line on the page is an honest summary of why gold and GLDC have more upside per dollar effort and we would rather be the definitive product on one commodity than an early entrant in two. Now getting into the end, I want to step back for a couple of minutes because the size of what we are building is why we are doing this at all. Tokenized real-world assets on chain now stand at roughly $38 billion excluding stablecoins, up from $11.8 billion just two years ago, with holders past 1.7 million. BCG and ADDX put out tokenized illiquid assets at around $16 trillion by 2030, roughly 10 percent of global GDP.
And this is no longer a category that needs defending. BlackRock, Franklin Templeton, Apollo, WisdomTree—they all have live tokenization programs. JPMorgan has tokenized products, deposits, and collateral settlements in production through Connexus. DTCC is piloting tokenized settlements across 1,000 equities, index ETFs, and treasuries with more than 50 firms. The New York Stock Exchange has announced 24/7 tokenized security venues, and Nasdaq has filed to list tokenized equities. The largest institutions in finance have decided that this is where the markets are going. Now point that at commodities. Satis estimates the nominal value of global commodities market at $146 trillion in 2026. Inside that, gold alone is roughly $32 trillion, $11 trillion of which is financial gold, and $560 billion sits in gold ETFs earning nothing at all for the people who own it, actually costing them. This is one commodity.
Commodity markets are among the largest assets on earth and the least modernized part of finance. They still run on paper, ledgers, and trust intermediaries. We are simply re-wrapping them. We are making them better than what exists today. Physical gold and gold ETFs are non-earning assets that settle slowly and trade on schedule. Ours pay the yield, trade around the clock, and settle instantly. Every asset we bring onto these rails inherits those properties, and we will earn three fee streams on each one for the life of every token issued. Whoever owns the rails when commodity markets move on chain owns the economics of that migration for decades. That is the company we are building. Gold is the first proof of it, not the whole of it. So here's what to hold us to over the next 90 days. First, convert the first institutional allocations into GLDY. That is the priority above anything else and is what turns a proven product into a growing one.
Second, onboard our first institutional partners as holders—with names on the register, not just in the distribution list. Third, launch initial liquidity bootstrapping for GLDC in the third quarter: the founding holder base built before the token exists. GLDC will be launched once the initial liquidity bootstrapping is complete. And then complete the Equity Trust IRA integration and keep testing and keep distributing monthly yield without interruptions. A word on what initial liquidity bootstrapping is because the mechanism matters. This is the first step onto GLDC and a way for us to secure additional capital for GLDC so that there is a robust market at launch. Think of it like a wait list where investors can subscribe to buy GLDC on launch and get incentives to be early. Overall, the multiyear opportunity is in front of this company and is real. The way we earn into it over the next 90 days will be transformational.
With that, this concludes the presentation portion of the call. I want to say thank you to everyone for attending today. I am extremely excited for the future of StreamX, and the next 90 days will be transformational. I feel truly like we are at an inflection point and cannot wait to show you. Now let us take questions. We collected some questions ahead of the call. You can also submit your questions live on the online link. We will work through as many as possible. If we cannot get to you, please feel free to reach out to ir@StreamX.com and submit them there. A member of the team will make sure to get back to you. Okay. Now into the questions. First question I am going to give this to you, Christine.
So the revenue for the quarter was $146 thousand. When does this become a real revenue line? Great. Thank you, Henry. Revenue scales with two things today: assets outstanding through the annual lease rate fee and turnover through the transfer fee. Both are functions of adoption. So Henry, when you describe GLDC as a third stream and as a different shape—reserve income that scales with supply—what I would point to across all of them is the operating leverage. The cost base to run this platform is largely fixed and already built, and so we will continue to see revenue grow with adoption and volume. Awesome. Thank you, Christine.
And next question for you as well. So the 10-Q says StreamX holds 91 percent of GLDY. So external holders are about 280 ounces. Is that true? And can you explain that?
Yes, that is true. And let me explain that head-on. We ceded the reserve with our own capital deliberately because we are not going to launch a gold product and ask other people to fund the gold behind it. That is why the split looks the way it does. It is why our balance sheet carries the $15.5 million of physical gold at cost. It also means something useful about the mechanics with capacity in the reserve today. When an institutional order arrives, we are not starting from zero on sourcing and vaulting. This infrastructure is already carrying the weight. Fair. Thank you very much, Christine.
And now on to some live questions, which I believe this should be both you and I, Christine, can answer. I will let you go first. So $1.1 million per month burn going into the third quarter: where do you focus spend as each dollar becomes incrementally more valuable? Since GLDY is a more retail-focused product, how do you grow that while remaining tighter on expenses, keeping distribution costs low, and keeping marketing spend low? Christine, I will let you start and then I will hop in there too.
Yeah. So I think the key here is that, as we have said, we really have a cost basis that is foundational that we can grow on. So it is largely fixed. And so with the launch of GLDC, we will be leaning on our current marketing partners. We will continue to focus on capital being attributed into our development, but overall we will continue to maintain the way that we manage costs today. As we have already laid the foundation from a cost basis, that allows us to continue to do that.
Yeah. No, 100 percent. And thank you, Christine, and thanks for the question. So I think something really important to note is when thinking about GLDC and looking to keep expenses low: GLDC is obviously going to be an asset that we market heavily to get out there in the market and make sure that people know about it. I think the best part about that is as a retail asset, the most powerful marketing you can do is organic. Organic marketing itself is largely cheaper than paid marketing, and it is something that our team has a lot of experience in. The marketing firm and I have been working in the digital asset space for a very long time. We launched products with small paid budgets that achieved significant distribution through relationships and organic buzz. Relationships really matter in that space. We have a budget allocated towards GLDC that is included in the burn that we are expecting for Q3, but it is also something that we can compound on our expertise and relationships within the crypto and digital asset space.
That allows for much wider distribution than GLDY, which is much more targeted and for accredited investors and institutions. So that is something that is really important to note on that side. With that, second question from the live call: an update on GLDY adoption within ETFs and institutional channels. It looks like Q3 could be catalyst-rich. Are there any key dates or metrics besides asset value to look out for to gauge how adoption is progressing in the quarter? 100 percent, great question. When you look at catalysts to watch in the third quarter, a couple of things stand out: one is the initial liquidity bootstrapping for GLDC, which will drive GLDY adoption. For more institutional and ETF channels, swaps being executed on GLDY is important. That has been something we have worked on heavily to give ETFs and hedge funds a way to allocate to the asset through mechanisms they already understand.
Mitchell, our CIO, has been leading that work with strong institutional partners. Continuing to build out custody relationships—Equity Trust being one of them and others that bring more institutional credibility—is also something to look for. On the liquidity side, watch how the liquidity we seeded in the market enables instant transactions of the asset. Overall, the biggest thing I would look for is the first significant institutional order we have said we want to bring in during the next 90 days. As that comes, the dominoes start to fall. Those are the signals allocators look for to gain comfort and allow hundreds of millions to follow after it. So keep an eye on swaps, custody integrations, liquidity behavior, and then, of course, AUM growth. Next question: is GLDY really an onboarding problem, or is investor demand below what we expected? Really good question. The evidence itself is that this is sequencing, not demand.
The product does exactly what we said: NAV tracks spot gold, yield has been paid four times, and the asset is liquid and distributed. Comparable assets in the market are primarily funded by large, chunky orders from a small number of investors. With GLDY, the questions we have heard were: one, how can I hold it; two, can I trade it; and three, how can I allocate it to my clients. We built the answers to all of those this quarter. Bringing institutional liquidity through Wintermute and MetaLayer and multiple secondary venues—roughly $12 million of institutional-grade liquidity—matters because investors want to know they can get out. Expanding custody through Inspira and Equity Trust is another credibility step. For example, Equity Trust will be custodying a tokenized asset for the first time here, which is significant. GLDC itself removes many friction points for GLDY, such as accreditation and custody constraints, because GLDC will be fully decentralized and permissionless.
Anyone can buy small amounts and hold it in their own wallet. That will grow GLDY AUM once launched. Next: how is the GLDC reserve income recognized and how much does StreamX keep? StreamX is the servicer of the independent foundation that issues GLDC; we are not the issuer. The foundation accrues reserve income from GLDY reserves. The foundation then invoices StreamX for services, which include marketing, operations, and support. StreamX earns servicing fees from the foundation for those services. Think of it similar to a stablecoin model: the reserve income accrues to the issuer or foundation, and the servicer is paid for providing the operational services. As AUM grows, services provided grow, and revenue flows to StreamX accordingly. That is a powerful model and highly capital efficient. Next question: your assets grow—explain the positives about not having to raise capital because tokens are funded by buyers.
The model indeed is capital light. Investors provide the capital to acquire the gold and the tokens. StreamX charges tokenization fees, management/lease fees, and transfer fees, all of which scale with AUM and turnover. We do not need to provide the asset capital ourselves. That makes the model capital efficient and high operating leverage. GLDC is a lever to scale GLDY AUM exponentially by removing accreditation restrictions and broadening distribution. Couple more questions; I think we will probably do one more.
One more, one more for you, and then we will close it up. Okay. Really simple question: why did you change auditors? We changed auditors to consolidate our fund audit and attestation work with the corporate audit, so we have a single accounting team which allows us to streamline our processes. There were no disagreements on any accounting principle matters, financial statement disclosures, or auditing scope or procedures with CBIZ. It was purely to focus on streamlining processes.
Amazing. Thank you, Christine. And now the question before we close out: why invest now? What makes this the moment? This is really important. We believe we are at a pivotal moment not only for StreamX but for the tokenization ecosystem as a whole. Look at what you should evaluate in StreamX. One, we have the team and technology in place that enabled us to gain real traction building a scalable fintech platform to tokenize real-world assets. Aside from the first investments into GLDY by accredited investors, we are actively cultivating institutional interest in GLDY. We have removed many of the obstacles for allocators so they can compare the asset on its merits: a yield-bearing gold token that provides the benefits of investing in gold plus a yield. We also expect to benefit from a fast-follower advantage. Supporting the launch of our permissionless token GLDC will drive AUM growth into GLDY.
The wider tokenization ecosystem is moving quickly. Tokenized RWAs stand at $38 billion and were $12 billion two years ago; holdings exceed 1.7 million and are growing rapidly. Institutional investors like BlackRock, Franklin Templeton, Apollo, and WisdomTree have tokenization programs. JPMorgan is settling tokenized products in production, DTCC and major exchanges are piloting and announcing tokenized securities venues. Tokenization is happening. Commodities are a massive market and one of the least modernized parts of finance. Gold, specifically, is a huge pool of capital where many holders earn nothing. We are offering an alternative that pays yield, trades 24/7, and settles instantly. Every asset we bring onto these rails inherits those properties, and we earn multiple fee streams for the life of every token issued. Whoever owns the rails when commodity markets move on chain owns the economics of that migration for decades.
That is what we are building: gold is the first proof, not the whole of it. We are in the right position: legal wrapper, custody, attestation from a tier-one firm, and distribution concurrently. Very few companies hold all of those. StreamX is one of them and ready to take advantage of the growth wave. With that, I think that is a good place to end. I really appreciate everyone joining today and the questions submitted. If you have any other questions, please send them to ir@StreamX.com. We will be happy to speak with you. I am very excited about the next 90 days for where this company is going. Thank you very much, and have a great evening. We will talk soon.
This concludes today's meeting. You may now disconnect.