Below is a list of the top 6 backed Cryptocurrencies for 2022

Concern about the depreciating value of fiat currencies has led people to seek assets that can preserve their purchasing power.

Assets like stocks and bonds can go up in absolute value. Unfortunately, their value is denominated in fiat currencies.

If the $ price of a stock you own doubled, but the purchasing power of the $ goes down by 150%, you would still have lost purchasing power.

Precious metals like gold and silver have traditionally been used as hedges against inflation.

The 2 major drawbacks of buying physical are the need to store them securely and the transaction cost.

The buy sell spread depends on the type of precious metals and the country you are in. The spread in my country Malaysia, is much higher than in USA which has many many mints producing bars or coins and many established dealers of such products.

The dealers in Malaysia buy from overseas dealers and have to pay air freight & insurance. They also incur additional holding cost. The buy sell spread in Malaysia can exceed 20%

A gold backed crypto is a crypto is one where the crypto is backed by gold that is held by a custodian.

Something like how stable coins like USDT and USDC are backed by the US$.

Instead of using the fiat currency US$ for backing, the gold backed crypto is backed by gold.

The buying and selling of such cryptos can be done like any other Cryptos on both centralised or decentralised exchanges (CEX'S and DEX'S).

Transaction costs are low.

There is no need to physically  deliver the gold so there is no freight or delivery costs. 

There is also the saving of storage cost and less risk of it being stolen.

However it must be emphasized that the gold backed crypto is a derivative based on gold and does not give the holder actual ownership of gold.

There is a strong case for holding actual physical gold but 🦋 will leave that for another post.