Many a crypto degen trader is trolling digital-asset markets for the next hot token. The blockchain industry's latest offering might be thought of as thermonuclear.

A uranium-linked token called Uranium3o8 (U) opened for trading on Uniswap Tuesday in an attempt to shake up how the highly-regulated heavy metal is bought and sold.

"Our goal is to create a spot market" for uranium, said Ryan Gorman, head of strategy at Uranium3o8.

Canada-based public uranium exploration and development firm Madison Metals Inc. (GREN) provides the asset backing for the U tokens, which represent one pound of uranium. Sanmiguel Capital Investments LLC is responsible for the token issuance and administration.

Owners of U token can't just request physical delivery of its underlying yellowcake. Although U is listed on a decentralized exchange, its website says buyers must pass a "strict compliance protocol" managed by Madison Metals, to make sure they won't build a nuclear weapon, for example. They also need to redeem a minimum of 20,000 U tokens.

"The project has already received interest for up to $10m of physical settlement order from a compliant and licensed uranium broker, with delivery to a compliant, licensed enricher in Europe," said Madison Metals CEO Duane Parnham.

The offering arrives as tokenized real-world assets (RWA) have become a red-hot sector in crypto. The process consists of crafting tokens backed by traditional assets – bonds, investment funds or commodities like gold – and placing them on blockchain rails.

Traditional finance giants as well as digital asset firms are making headway in tokenization as the technology promises lower frictions in trading and transacting, near-instant settlements, less administrative burden and can provide improved access for investors. Asset management firm 21.co forecasted that the market for tokenized assets could mushroom to $10 trillion by the end of the decade.

The token's link to its underlying asset is structured as a forward sales offtake agreement, according to Parnham, a 30-year veteran of the uranium mining industry. He said the token's uranium backing will come from Madison's Namibian mines, which are not in production yet as well as its partnerships with other industry players.

Some of the yellowcake is ready to go for physical delivery, said Gorman. The rest of the 20 million pounds of earmarked uranium is still underground.

Uranium is a crucial metal for energy production in nuclear power plants with rising demand. However, the commodity doesn't have an open spot market, and trading occurs via private negotiations between buyers and sellers, commodity giant Cameco points out.

Uranium3o8 aims to make the asset's pricing less opaque and accessible for a broader investor base by replacing the industry's current procurement contracts process.

"The bidding for this contract [private negotiations] can last days, weeks or even months, and is subject to inconsistent, objective pricing based on a number of opaque factors. With $U, the price the token trades at is how much an institution pays per ounce of uranium," said Gorman.

Uranium3o8 plans to roll out additional products for the uranium industry participants early next year, Gorman said.