(Kitco News) - Silver has traditionally been viewed as a non-yielding asset, but one financial technology company is looking to change that narrative by opening the metal’s historically opaque lease market to a broader range of investors and making it more accessible through tokenization on the blockchain.
Theo, an onchain finance platform, has launched thSLVR, a tokenized silver product that gives investors exposure to physical silver while capturing income from leasing the metal to industrial users.
The company said the product launched with more than $50 million in silver leases already generating income. Unlike some existing tokenized precious metals products, Theo said thSLVR’s yield is generated directly from leasing physical silver rather than from platform trading fees.
Last week’s launch comes as the silver market continues to face historically tight physical liquidity. According to Theo, roughly 83% of silver held in London vaults is locked inside physically backed investment products, leaving about 136 million ounces available for trading and leasing — a record low.
In a comment to Kitco News, Iggy Ioppe, Chief Investment Officer at Theo, said tight physical availability continues to keep lease rates well above levels seen before 2025.
“Silver has always paid an income to whoever lends it; refiners and fabricators borrow it constantly, but that income has gone to the banks, not the owners,” Ioppe said. “With the free float near a record low, and lenders still earning around 2.3% a year on three-month silver this month, several times the pre-2025 norm, that income is more valuable than it's been in years, and it's finally reaching holders.”
Although lease rates have come down sharply from last year’s extreme levels, they remain elevated by historical standards. Theo noted that London’s one-month silver lease rate surged to roughly 39% in October 2025, compared with a historical norm below 1%.
In an interview with Kitco News, Abhi Pingle, co-founder of Theo, said silver’s substantial industrial demand makes it particularly well-suited to generating income through leasing.
Whereas gold attracts significant retail and institutional investment demand as a store of wealth, Pingle said Theo is approaching silver primarily as a yield-generating asset. Income can be generated both from the structure of the futures curve and by physically leasing metal to industrial users and refiners.
That distinction could become increasingly important as investors face elevated interest rates and rising opportunity costs for holding traditional non-yielding precious metals. This week, 10-year U.S. bond yields hit a 20-year high at 5.15%
Pingle said Theo’s silver financing is structured around ultra-short-duration credit, allowing yields to adjust alongside short-term interest rates rather than locking investors into longer-duration credit exposure.
“These products that we're constructing are actually built to be ultra-short duration,” he said. “So they are just kind of like fixed-income-plus or like money-market-plus products.”
Pingle added that the short-duration structure allows yields to move broadly alongside SOFR while investors maintain exposure to the underlying metal.
At the same time, Pingle said the product addresses a growing problem for industrial silver consumers. Elevated prices and increased volatility have made maintaining inventories more expensive, particularly for smaller and mid-sized manufacturers.
He explained that banks can be reluctant to lend directly against volatile silver inventories without significant margin requirements and active hedging. Theo instead provides financing that allows industrial users to access silver without tying up as much working capital or taking on the same degree of price risk. In return, the lending activity generates asset-backed income for silver holders.
Theo said silver backing thSLVR is leased to established institutional counterparties under standard market terms. Borrowers take delivery of the metal and ultimately return equivalent silver along with the lease fee, allowing token holders to retain silver price exposure while collecting lease income.
Pingle said Theo currently vaults its silver with StoneX, which also acts as a trading partner for purchases and sales of the physical metal. thSLVR is expected to be available through multiple crypto exchanges and onchain venues, as well as through private placements and other distribution networks.
Beyond investment demand, Pingle remains optimistic about silver’s long-term industrial fundamentals, particularly as global electricity demand increases and solar capacity expands.
Although manufacturers have explored replacing silver with materials such as nickel alloys as prices have risen, Pingle said substitutes can have drawbacks, including lower resilience, corrosion and weaker energy-conversion performance.
He said solar installations should remain an important source of long-term silver demand, with grid connectivity potentially posing a bigger constraint on growth than silver prices themselves. Over the next five years, Pingle expects substantial solar buildout as grids adapt and battery storage and microgrids become more widespread.
Silver’s physical properties could also make substitution more difficult in applications where reliability and longevity are critical. Pingle said that while some alternative materials may be suitable for less demanding applications, silver remains attractive for solar systems powering infrastructure such as data centers and other industrial facilities, where long-term efficiency is particularly important.
