Oil and gas royalties have long been valued for their ability to generate steady, inflation-protected income. Yet, for decades, access to these assets was limited to industry insiders and institutions, and even they endured slow payments, paper checks, and opaque accounting.

Mineral Vault I changed all of this at launch. By tokenizing ownership in real, producing US mineral interests, Mineral Vault has transformed the traditional royalty distribution model into a headache-free process with a blockchain-native yield stream.

Step 1: Production & Sale of Hydrocarbons

It all begins at the wellhead. More than 2,500 producing wells across 9 U.S. states generate monthly revenue from the sale of crude oil and natural gas they produce.  Mineral Vault I owns a royalty interest in all of these wells.

Operators sell the produced hydrocarbons to midstream or downstream purchasers, who then remit payment to the mineral interest owners based on their ownership and royalty percentages.  This results in steady income for the Mineral Vault I Ltd tokenized entity.

Because the portfolio is widely diversified, spanning over 150 operators and 10,000 gross acres, the production base is resilient, insulating investors from the impact of any single well, geographic play, or operator.

Step 2: Net Revenue Calculation

Once gross revenue from oil and gas sales is received, deductions are applied for property taxes and minor joint-interest billing expenses. For example; between June and August 2025, gross monthly revenues ranged from $115,000 to $158,000, while expenses averaged under 3% of gross revenue, leaving healthy monthly net income.

From this, a 10% management fee is paid to Mineral Vault LLC, covering property operations, reporting, and investor administration.

The remaining 90% of net revenue becomes the dividend pool distributed to token holders.

Step 3: On-Chain Dividend Distribution

In the traditional royalty model, payments can take months. Checks are mailed. Tax forms are delayed. Ownership changes are buried in courthouse paperwork.

With Mineral Vault’s tokenized structure, those inefficiencies vanish.

Leveraging Plume Network’s Arc tokenization engine and Nest Vault infrastructure, royalty income is automatically converted into USDC stablecoin and allocated proportionally to token holders each month.

For example, in August 2025, token holders received an implied 13.34% annualized pre-tax yield, deposited directly to their wallets through on-chain distribution.

Every dividend is:

• Programmable: Executed by smart contract according to ownership share.
• Transparent: Every dividend report is published publicly at mineralvault.io/transparency.
• Auditable: Investors can reconcile on-chain payouts with off-chain property performance.  All checks received from operators are publicly available for audit.

Step 4: Automated Reporting & Tax Readiness

Each dividend cycle concludes with a detailed Dividend Report, outlining:

• Gross revenue by source (crude oil, natural gas, lease bonuses, etc.)
• Expense breakdowns
• Net revenue and total dividends
• Token circulation and payout ratios
• Implied annualized yields

This degree of monthly financial transparency is rare in private energy investment, and unprecedented in tokenized assets.

Beyond visibility, the digital-first model simplifies record-keeping and tax compliance. Each report provides verifiable documentation of income streams, deductions, and ownership, making year-end reporting seamless.

Step 5: Continuous Cash Flow; Continuous Access

Mineral interests are real property rights, with revenue from producing wells continuing for years or even decades. As operators drill new wells, those income streams can extend even further.

Tokenization makes this cash flow divisible, transferable, and instantly accessible. Investors gain exposure to one of the most stable yield streams in the U.S. economy, enhanced by the speed, transparency, and liquidity of blockchain infrastructure.

Why This Matters

Tokenized yield from real-world energy assets represents something transformative: the fusion of traditional cash flow with programmable finance.

For investors, it means:

• Passive income from proven American oil & gas assets.
• Real-time visibility into asset performance.
• Access to yield without institutional or geographic barriers.

For the broader market, it offers a blueprint for how billions in private, income-producing assets, oil and gas, real estate, infrastructure, and beyond, can responsibly and compliantly move on-chain.

Every USDC distribution from Mineral Vault isn’t just a payment, it’s proof of concept. It demonstrates how blockchain can modernize a century-old industry, aligning physical energy production with the precision of digital finance.

By bridging the gap between the real and digital economies, Mineral Vault is doing more than tokenizing assets. It’s unlocking energy wealth for investors everywhere, and charting a path toward a more efficient, transparent, and accessible financial future.

In addition to opening the lucrative mineral interest asset class to a global investor base, Mineral Vault’s vision to tokenize mineral interests also resolves numerous issues plaguing mineral interest ownership & transfer in the United States presently. Let’s take a closer look:

Mineral Ownership Challenges Resolved By Tokenization

As of 2024, the process of ownership transfer in the mineral and royalty interest sector is extremely inefficient for several reasons, all of which are resolved by tokenization.  The major inefficiencies in the process are related to title verification and transfer administration.

Title Verification Challenges

When acquiring interests in mineral properties directly, prospective buyers face tremendous title verification challenges that prevent most non-professional buyers from participating in the marketplace.  These challenges include:

• No title insurance product. The complete lack of a title insurance product for mineral & royalty interests means that title must be independently verified by the purchaser to their satisfaction. In layman’s terms, the buyer of a mineral property is likely to lose most or all of their money if the person they are paying to purchase the property later turns out to have not been the rightful owner of the property in the first place! To resolve this problem, generally “landmen” are hired to review courthouse records to create a chain of title, gather the related documents from the courthouse, and provide a summary “mineral ownership report”.  These can optionally be given to a title attorney who will review them in-depth and create a “title opinion” which is a more detailed report listing title inadequacies and any issues which should be addressed before closing.  Neither of these vendors provide any title guarantee or insurance and all title risk is borne by the purchaser of the mineral property.

• Extreme title complexity. The complexity of the title review process is increasing exponentially as time passes and ownership chains become longer and longer, with an exponentially increasing ownership base, caused by the fact that deceased owners often leave their interests to multiple children or grandchildren, simply subdividing the ownership interest between them.  This phenomena doesn’t typically happen with surface interests, since it is difficult for more than one person to “use” or benefit from the surface interests — mineral interests, however, don’t have any utility other than the investment-like income they can provide from production.  As a result of the fact that mineral interests are often subdivided from estates (and therefore handled more like shares of stock than traditional surface real estate), most property parcels in high-production areas of the U.S. have between 20-50 distinct owners, each with a different percentage ownership in the property parcel.

THE TOKENIZATION SOLUTION: Title Verification Challenges

From the moment that mineral interests are placed on the blockchain and traded as tokens (whether individually or in aggregate, as in the initial Mineral Vault offerings), the blockchain resolves issues of provenance completely.  The blockchain is a verifiable, public ledger of ownership, meaning new owners can be 100% sure that the seller of the tokenized interest they are purchasing is in fact the rightful owner.

But what about title defects which arise from before the time the particular mineral interest was tokenized, debasing the token’s representative ownership in property from the very beginning?

At Mineral Vault, our thesis is that the party which tokenizes mineral interests in the first place should bear the risk of any title failures which predate the tokenization. Thus, for title failures occurring prior to tokenization of the assets, Mineral Vault has provided a title guarantee, ensuring investors are “made whole” relative to their original investment in the property if title failure happens*.

The result of the blockchain solution is that the title verification aspects of the ownership transfer process are completely seamless and void of the need for expensive landmen and title attorneys.

Transfer Administration Challenges

In addition to the title challenges associated with direct mineral interest investment, there are numerous administrative hurdles encountered by would-be owners:

• Deed Drafting & Filing. Similar to the process for acquiring a surface interest, to purchase a mineral or royalty interest, at least one Mineral Deed, Mineral & Royalty Conveyance, Assignment, or similar document must be created by an attorney or other professional, then executed and notarized.  It must then be filed at the county courthouse wherein the property resides, a process which can take up to 2 weeks or more if the recordings must be mailed in.

• Purchaser Notification & Pay Status Update. Upon successful filing of the deed/conveyance, a copy of the recorded document must then be provided to the purchaser(s) of the oil, gas, or other hydrocarbons actively being produced by the wells on the acreage acquired.  This document evidences the transfer and allows the purchaser to place the new owner “in pay” on the wells, meaning that the new owner begins to receive the royalty checks for revenue.  In practice, this process can take 3-6 months or more with many purchasers whose transfer departments are understaffed, overworked, and severely backlogged due to the increasing number of transfers happening each year.
  • The “purchaser” is often the operator of the well(s) in question but does not have to be, as some small operators do not purchase the hydrocarbons produced by the wells they drill themselves, but rather sign a purchase agreement with a separate vendor who handles the hydrocarbon pick-up/transportation from the wellhead and royalty payments to all mineral owners in accordance with the amounts picked up.  Note also that, if a well produces both oil and natural gas, for instance, there could be a different purchaser for each of the commodity types, meaning one for oil and one for natural gas.  In this scenario, both purchasers must be notified separately.

• Tax Authority Notification & Tax Record Update. Also upon successful filing of the deed/conveyance, a copy of the recorded document must also be sent to the tax authority responsible for the property in question — for example, the Midland County Central Appraisal District (“Midland CAD”) for a property located in Midland County, Texas.  The tax authority will review the document and place the new owner “in-tax” on the property in question, ensuring that the new owner receives the property tax bills rather than the previous owner.  This is necessary to ensure that property taxes are paid (whereas they might not be if the bills continue to be mailed to the previous owner, who knows they sold the property) because if the taxes go unpaid for a long enough period, the properties can ultimately be sold out from under the new owner at the courthouse steps in a Tax Sale. Therefore, ensuring that the tax records show the new owner as the record owner for tax purposes is a critically important step in the transfer process.  In practice, the governmental tax authorities often use vendors to manage and update their tax records, many of whom are understaffed and unresponsive to update requests, meaning many tax record updates can take 3-6 months or more, similar to pay status updates.

THE TOKENIZATION SOLUTION: Transfer Administration Challenges

All of the administrative challenges described above are rendered totally unnecessary & void by tokenization.  From the perspective of all of the entities above (the county courthouse, the purchasers, and the tax authorities), the property is still owned by the same party, which is the tokenized entity (also referred to as the “Special Purpose Vehicle” or “SPV”), and only ownership interest in the SPV is actually being exchanged.  This in effect transfers ownership interest in the mineral property, but does so in a way which totally circumvents the need for the administrative steps traditionally required and thereby greatly improves property liquidity.

Conclusion

The application of blockchain technology to the mineral interest ownership tracking & transfer  process will introduce many desperately-needed efficiencies to an industry that is rapidly increasing in both scale and complexity.

In the future, after many Mineral Vault offerings and the resulting tokenization of a tremendous quantity of mineral & royalty interests, we believe tokenization can be the “grand / ultimate” solution to the crisis of mineral interest title & transfer in the United States.  In the process, we will not only resolve the title and administrative challenges described in this article, but we will also open investment in these assets to millions of new investors globally, further improving their liquidity.

*The “make whole” amount is an amount, in USD, determined by portfolio manager Mineral Vault LLC. The calculation shall be an amount of value attributed to the property at time of token issuance less any payments received on the property by token holders since that time.  See also the “Disclaimers” section of the website at mineralvault.io.

When investors look at Mineral Vault I, what they see is a diversified portfolio of mineral and royalty interests spanning more than 10,000 gross acres and 2,500 producing wells across 9 different U.S. states. What they don’t see, however, is the extensive work that went into creating this portfolio — years of research, negotiation, and due diligence that transformed scattered mineral rights into one of the first tokenized funds of its kind.

Closing 350 Transactions Across 9 States

Every property in Mineral Vault I was acquired between May 2020 and May 2023 by Allegiance Oil & Gas (the oil & gas investment company behind Mineral Vault).  This was a period that included volatile oil prices, shifting operator activity, and post-pandemic energy market dynamics.  Over those three years, Allegiance completed 350 individual transactions with mineral and royalty owners across the U.S.

These weren’t bulk acquisitions from a single seller, group of sellers, or brokers.  Every single counterparty was different!  The process required direct negotiation with landowners, estates, and family trusts. In many cases, ownership was fragmented among dozens of heirs, each holding only a fractional interest, and in many transactions curative title was required before the transaction could be finalized.

This painstaking, property-by-property approach created several advantages:

Better pricing control – By avoiding auction environments and brokers, Allegiance could acquire assets at fair market value without paying speculative premiums.

Higher quality assets – With direct relationships, the team could be selective, targeting only properties that met strict evaluation criteria.

Diverse sources – Hundreds of transactions meant exposure to thousands of acres and wells, helping build a portfolio resilient to market swings.

Title resilience – By painstakingly curing title for every property, one at a time, Allegiance was able to close acquisitions with title so clean that they’ve agreed to offer a title guarantee to token holders for all properties in Mineral Vault I – eliminating one of the biggest risks in traditional mineral rights investment.

What Makes a Property Attractive?

Not all mineral interests are created equal. Before becoming part of the Mineral Vault I portfolio, each property was screened using a multi-factor evaluation process designed to balance current production with future upside.

Key criteria included:

Production Track Record – Priority was given to properties with active wells already generating monthly cash flow. This provided immediate yield stability.

Diverse Basin Geography – Holdings were intentionally spread across numerous top U.S. shale plays in completely different geographic areas, including the Permian, Eagle Ford, Bakken, Haynesville, and Barnett, to reduce concentration risk.

Operator Quality – Emphasis was placed on established E&P companies with proven operating track records.  And with more than 150 operators represented in the portfolio, operator concentration risk was also greatly mitigated.

Future Development Potential – Properties with additional, undeveloped acreage offered the possibility of new wells, providing natural growth in cash flow and reserve replacement as existing wells deplete.

Commodity Mix – Balancing properties with primarily oil vs. primarily natural gas exposure ensured the portfolio could benefit across numerous, different commodity cycles.

Together, these criteria created a portfolio that wasn’t just cash-flowing today, but also positioned to capture future drilling, leasing, and development opportunities.

Why This Matters for Investors

The value of this disciplined acquisition strategy for investors comes through in three ways: Scale and diversification, stable yield, and upside potential.

The value that scale and diversification hold is that exposure to thousands of wells across multiple states reduces reliance on any single operator, basin or commodity. Stable yield provides value in early dividend reports that confirm steady, monthly royalties from producing properties. Finally, the upside potential value proves vital when new drilling occurs in active basins like the Permian and Eagle Ford, as this unlocks new cash flow streams for investors that partially offset the depletion from existing well production – without requiring new capital from investors.

Importantly, all of this groundwork was done *before* tokenization. Investors entering Mineral Vault I aren’t speculating on future acquisitions. They are stepping into a portfolio that is already diversified, cash-flowing, and de-risked.

From Groundwork to Tokenization

The heavy lifting; from negotiating 350 transactions and verifying title across thousands of wells, to assembling properties across 9 states, was complete before the first token was issued.

By placing this portfolio on-chain, Mineral Vault makes an asset class once limited to insiders available to investors around the world. Investors aren’t just buying exposure to oil and gas properties, they’re accessing an asset backed by years of acquisition expertise, made liquid through blockchain infrastructure. Tokens bring efficiency, transparency, and liquidity to an industry that historically required significant capital and private connections.

Behind every digital token is a real, tangible asset. In the case of Mineral Vault I, those assets were carefully sourced, one deal at a time, by a team with decades of oil and gas experience.

That’s what makes Mineral Vault different:

A portfolio built on solid ground.

Engineered for yield today and upside tomorrow.

Made accessible to investors everywhere through tokenization.

When Mineral Vault launched its first tokenized offering earlier this year, we set out to prove two things:

1. That U.S. mineral and royalty interests are one of the most resilient, income-producing asset classes available.
2. That blockchain-based tokenization can open these historically exclusive investments to a far broader investor base.

With three months of dividends paid and the corresponding reports now published publicly, we can step back and ask: what do the numbers tell us about the portfolio, the underlying assets, and the tokenized investment model itself?

A Snapshot of Mineral Vault I’s Performance To Date

All dividend reports are published at links given publicly on our Transparency Portal, giving token holders a full view of gross revenues, expenses, and distributions.

Dividend Report #1 – June 2025

• Gross Revenue: $115,516.54
• Net Revenue: $114,999.55
• Dividends Paid: $103,499.60
• Implied Pre-Tax Yield (annualized): ~12.42%

Dividend Report #2 – July 2025

• Gross Revenue: $158,680.82
• Net Revenue: $154,349.06
• Dividends Paid: $138,914.15
• Implied Pre-Tax Yield (annualized): ~16.67%

Dividend Report #3 – August 2025

• Gross Revenue: $123,640.08
• Net Revenue: $123,475.87
• Dividends Paid (Total): $111,128.28
• Implied Pre-Tax Yield (annualized): ~13.34%

The pattern is clear: revenue is strong, dividend distributions are healthy, and returns are well in excess of initial targets.

What the Results Show

Looking at these first three months altogether, there are three main themes to be observed:

• Stable Cash Flow – The producing mineral and royalty interests inside the portfolio are delivering consistent distributions, validating the reliability of the underlying asset class.
• Attractive Yields – With double-digit annualized pre-tax returns each month, Mineral Vault I is providing the kind of income that historically attracted institutional investors to minerals.  Due to the nature of the asset class, these aggressive returns are simultaneously acting as a hedge against inflation and public market volatility.
• Tokenization in Action – The reports also demonstrate how blockchain simplifies a once complex process. Ownership, dividend tracking, and distributions are being handled seamlessly, without the paperwork or delays that often characterize traditional mineral ownership.

A Primer for Newcomers

Here are some key concepts that are useful to know if you are new to mineral interest investing or tokenized assets in general. We also have a handy FAQ page for more in-depth questions.

What are mineral interests?
In the U.S., mineral rights allow the owner to benefit from subsurface oil and gas production. When operators drill and produce hydrocarbons, mineral owners receive royalty payments.

Why are they attractive?
Mineral ownership is passive. Owners do not fund drilling, manage operations, or take on debt. Instead, they receive income streams tied directly to production. This makes minerals different from other investments in oil & gas.

How does tokenization work?
Mineral Vault I Ltd, a BVI-registered entity, holds the portfolio. Ownership is represented through $MNRL security tokens. Each token corresponds to a proportional share of the entity’s revenue, with dividends paid out accordingly.

Why emphasize transparency?
The mineral industry has historically been opaque. By publishing property-level information, check-level revenue, and monthly dividend reports, Mineral Vault sets a higher standard for visibility and accountability.

Numbers in Context

While the three reports are encouraging, it is worth remembering that mineral revenues naturally vary month to month. Commodity prices, operator decisions, and production volumes can all influence distributions.

That said, the data illustrate the advantages of diversification. Mineral Vault I includes interests in more than 2,500 producing wells across nine U.S. states. This breadth helps smooth out volatility from any single operator or basin.

Another point of context is taxation. The August report shows both pre-tax and post-tax yields, illustrating how U.S. source withholding impacts foreign investors. By reporting these figures clearly, we help investors understand net returns – not just headline numbers.

Mineral Vault I is the foundation of a longer-term vision: to bring mineral and royalty ownership into a more transparent, accessible, and scalable format. With Mineral Vault II in development, more properties and more investors will soon be part of this ecosystem.

The early results confirm that tokenization is not just theoretical. It is producing real, tangible returns, delivered monthly, with data shared openly. Each report strengthens the case for minerals as a stable asset class and for blockchain as a practical tool in energy finance.

Further Reading

All three dividend reports and supporting data are available publicly at links given on our Transparency page.  For convenience, here are links to the first three months of data:

• Dividend #1 (June 2025)
• Dividend #2 (July 2025)
• Dividend #3 (August 2025)

The first three dividend reports for Mineral Vault I demonstrate a simple truth: mineral rights, when packaged transparently and managed via blockchain, can provide investors with stable cash flow, attractive returns, and clear reporting.

For investors new to the space, these reports offer more than just numbers – they are proof that tokenized minerals can work in practice, not just in theory. For existing token holders, they reaffirm the value of a model built on openness and sustainability.

As the Mineral Vault platform grows, this foundation of transparent reporting will remain central. In a market that too often operates behind closed doors, we believe visibility is the strongest foundation for long-term trust and growth.