A small team working out of Larkspur, California, thinks they’ve cracked one of the oldest problems in commodity investing: how do you own oil without dealing with the messy, expensive machinery of futures contracts? Their answer is to stick it on Ethereum.
Energy Substantiation Partners is launching $WTIC, an ERC-20 token where each unit represents one barrel of physical West Texas Intermediate crude oil, backed 1:1 by independently verified energy receipts. In English: it’s a stablecoin, but instead of being pegged to the dollar, it’s pegged to a barrel of the stuff that makes the world go round.
How $WTIC actually works
The mechanics are straightforward, at least by crypto standards. Minting a $WTIC token requires a USDC deposit plus a 0.10% fee. Each token is substantiated by what the company calls Volumetric Energy Receipts, which are held by an independent custodian and audited on a monthly basis.
Token holders can redeem their $WTIC daily for either USDC or, if they’re feeling particularly ambitious, actual physical delivery of crude oil. The token is priced against the daily WTI benchmark, and the company claims zero tracking errors against that price.
