DigixDAO Coin Review: Liquidizing Crypto with Gold?
Quick inner navigation:
The cryptocurrency world is booming. Despite some pessimistic opinions that claim that cryptocurrency market will collapse there are some cryptocurrencies such as DigixDAO that prove the complete opposite of their growth and features.
DigixDAO has done the first on-chain Ethereum crowd sale and it took place in March of 2016. This is a big deal, as despite the huge risks and as a first-time implementation, it has raised 465,134 ETH which was worth 5.5 million US dollars back at the time. Currently, the DigixDao market cap is estimated to be $1,122,854,000. Here raises a question, what is so exciting and cool about DigixDAO that it had such a success? In this DIgixDAO coin guide, we will answer this question along with many others.
What is DigixDAO?
DigixDAO aka Digix-Decentralized Autonomous Organization has created crypto coins that are backed by gold. The DigixDAO includes a decentralized group of people who get to make decisions that will ensure the growth of the Global Ecosystem of Digix.
Those people who have DGD tokens are able to make decisions regarding the proposals that are submitted to DigixDAO. The incentive of decision making is the Digix growth due to which DGD owners get DGX token rewards, which is a token representing 1 gram of 99.99% LBMA standard gold. This way DigixDAO tries to keep some stability at DigixDAO price.
The team behind Singapore based company DigixDAO is a group of professionals who have a good background such as an outstanding education, rich work experience and devotion to what they do. The CEO of DigixDAO Kai Cheng, for instance, has a degree from NYU and worked on Wall Street with HSBC.
DigixDAO special features
- DigixDAO has two tokens DGD and DGX (for more information please read below).
- Introduces a stable coin.
- Crypto assets are not managed through a centralized database.
- There are no web-based log-ins.
- Provides a cold storage for DigixDAO cryptocurrency.
- The blockchain ledger appears to be immutable and saves a lot of time in comparison to blockchains such as Bitcoin’s and others.
Proof of Asset
In order to distribute DGX tokens representing 1g of gold, Digix utilizes Proof of Asset (PoA). Let’s try to understand what is Proof of Assets and how does it contribute to the process-
- The Proof of Asset protocol uses Ethereum and InterPlanetary 1 Files System aka IPFS, which tracks assets with the chain of custody.
- Proof of Asset Cards have the following information uploaded permanently on a database that is completely decentralized: Bar serial number, storage fees due, purchase receipt, audit documentation, SKU of the gold bar, time stamp of card creation, depository receipt , and chain of custody digital signatures (Custodian, Vendor, and Auditor). The cards of PoA are held in an Ethereum wallet.
- The verification process Proof of Asset records and does an audit trail for the assets on the Ethereum in order to create PoA Cards. These cards get certified through a process during which they use a digital signature in a sequence that comes for the entities on the custody chain – custodian, vendor, and auditor. These three validate further through proof of purchase as well as depository receipts, which are uploaded as a permanent record on IPFS.
The process of Proof of Asset requires systematic audits by a 3rd party auditor done on gold assets that are kept in the custodian vaults. The process covers verification of the gold bar’s authenticity, examination of the physical features along with weighting and so on. The records from the auditing process are included on the contact known as Gold Registry. Each bar of gold that is audited and has IPFS reference, then the Ethereum identity of the auditor is getting a fail or pass result.
DGX and DGD
As I mentioned above, DigixDAO has two tokens DGX and DGD. Here we will try to explain the reasons behind creating two tokens as well as the differences between these two.
DGX tokens are based on the smart contract that comes from Proof of Asset cards. As mentioned above these PoA cards create a DGX token and send to the Ethereum wallet for one gram of gold. This keeps Digix away from fractional reserves. It is also important to know that the DGX tokens can be divided to 0.001 grams. These tokens have two types of fees that are charged for storing and for the safety of gold. The fee per year is 0.6%, meanwhile, the fee that is charged while placing the tokens on the Ethereum wallet is 0.13%. These tokens are minted through Mineter Smart Contracts. DGX tokens bring advantages such as less volatile and better store of value for on blockchain Escrow services. These tokens can have various uses.
The other token of DigixDAO is DGD that is an ERC20 token. In contrast to the DGX token DGD token’s value tends to fluctuate due to the forces of the crypto market as well as the exchange rates. The total supply of the existing DGD tokens is 2,000,000 coins and 15% of these are allocated for the developers. DGD can be traded on exchange platforms. The prime goal of DGD is to reward those who contribute the DigixDAO. Those who hold DGD have a chance to vote and decide how DigixDAO funds should be allocated. In other words, DGD owners have managerial decision power over proposals that are submitted to DigixDAO. In July of 2017, there were 400 DGD tokens stolen because of the vulnerable crowd sale smart contract. The company, however, has fixed the issue.
Digix future projects
The creation of DGX tokens is just the beginning for Digix Global. Once a stable coin is introduced to cryptocurrency market the possibilities are endless. Here are some of the Digix projects that have a big potential.
Those whose switch is built as a service the wealth will be enabled to be passed as a Crypto Assets to the Ethereum address mentioned under the system of Digix.
An improved and less volatile version of Escrow services on the blockchain can be provided by DGX tokens.
Within the limits of the law, just like other tokens available in the market, DGX too, can be implemented to facilitate currency in games as well as used as a token for gaming. The gaming assets can be secured through PoA protocol.
Lending and Microfinance
This project will enable DGX gold for peer-to-peer lending. In other words, those who want to borrow can fund though dApp, which will be highly depending on their risk profile, negotiations for the rate of return on the funds borrowed, and reputation. At the same time, the payments will be serviced at certain intervals and in case of late payments, there will be late penalties. The idea is not as unique as it has been previously done by bitcoin. However, the stability of DGX price will make the overall process less risky.
Partnerships with stable coins
Digix and MakerDAO are partnering and combining the projects in order to create a stable coin in the blockchain ecosystems. The partnership is new and it has been announced in January of 2018.
Digix has competitors from two sides – gold selling institutions and from the crypto world. The major competitor from the gold selling companies is, for example, GoldMoney. It appears to be one of the main digital gold storage services and has assets for billions of dollars. It has even made its way to international stock exchanges. From the crypto market’s side, a healthy competitor for Digix is Tether. This is a coin which is also concentrated in making crypto coins as stable as possible by backing the coin with USD. Just like DGX that aims at backing crypto with gold.
Digix price growth
Digix price has been rather impressive. The growth has been really big. To give you an idea, during the ICO, DGD was worth $3 and as of March 2018, it is worth more than $596. Some people believe that in 5 years the price of DGD will be close to $1000. Interestingly enough, in January 2018 many different cryptocurrencies crashed and had drastic decreases in their prices, while DGD has kept enjoying its growth having a 60% price growth at the time. As for the market cap, Digix had $0 in market cap in 2016, but as of March 2018, it has reached to $1,122,854,000.
How to buy DigixDAO token?
If you are interested in buying DGD, please note that you cannot buy it with fiat money. The exchange platforms which trade DGD are crypto-to-crypto exchanges. As for DGX – it can be bought only on Digix marketplace with Ether (ETH) coins.
Here is a guide on how to buy DigixDAO tokens:
- Get a DigixDAO wallet. You can also get wallets such as MyEtherWallet. As for cold storage wallets – Trezor and Ledger also support Digix.
- If you do not have any cryptocurrency that can be traded for Digix buy Ether or Bitcoin (in order to find out how to by Bitcoin check this out).
- Deposit you Bitcoins on the exchange platform of your choice. An exchange platform that supports Digix is Binance.
- Get registered if you do not have an account on the exchange platform of your choice.
- After getting registered and verified, go to “Deposits Withdrawals” section.
- Send your Bitcoins from the exchange platform you bought it from to the one you are going to buy Digix from.
- Buy Digix with your Bitcoins.
- Once Bitcoins show up on your “available balance” you are good to continue the process and buy Digix.
- Buy Digix and store it in your wallet.
Storing your coins on a safe wallet is the essential part of the whole process. If your wallet is not safe enough you may become a victim of hacks and your coins may be stolen. In order to avoid similar unpleasant situations, you are advised to use cold storage wallets rather than hot storage wallets, especially if you are dealing with a large sum of crypto coins.
As mentioned above, wallets are a very crucial part for any cryptocurrency and here Digix is not an exception. Digix can be stored on Ethereum compatible wallets. Here are some of the wallets that are good options for Digix users.
MyEtherWallet is a free, open source, easy to use wallet. It supports both offline and online transactions. MyEtherWallet is compatible with various hardware wallets. However, some users claim that they became victims of hackers and attacks while using MyEtherWallet. The team behind this wallet keeps working hard on improving it and making it as secure as possible.
Ledger Nano S is one of the most popular hardware wallets. The company behind Ledger Nano S is a multinational one and delivers the wallet worldwide. These wallets have three additional levels of safety other than SID. It has a nice design and comes with a screen. The device itself is easy to use and doesn’t require any technical knowledge. The wallet works for Windows, Mac, Linux, and Chrome OS. However, these wallets are not free and they cost around €79.
Trezor is another well know hardware wallet with a rather good reputation. The wallets are safe as they are offline, their design is convenient and the wallet itself is quite easy to use. However, Trezor does not use two-factor authentication. Also, these wallets are not free and they retail around €89.
Jaxx is a multi-coin hot mobile wallet that works since 2014. As a hot wallet, it can be downloaded to your gadgets and is very convenient to use as thanks to it you have access to your coins as long as you have access to the Internet. However, from the safety’s point of view, online storages for cryptocoins are always at the risk of being hacked.
Usually, when people are interested in a cryptocurrency they consider either mining or buying it. However, in case of DigixDAO, mining is not an option. DGD has a predetermined supply and is a non-mining coin. As for buying here are some of the exchange platforms that trade Digix.
Binance is a fast growing exchange platform that has started as a startup and now is valued around $2 billion. Binance is a user-friendly platform that is available in multiple languages. The platform has implemented two-factor authentication.
- Low fees.
- A wide variety of coins.
- It lets the users vote on which currency should be supported next.
Huobi is an exchange platform whose target users are mainly the Chinese users. Initially, it has started as a trading platform just for Bitcoin and Yuan (the Chinese fiat currency), however, due to certain regulations along with the demand the company opened its way to global market by supporting other cryptocurrencies among which Digix can be found as well.
- No fees.
- Highly liquid.
- Has a good reputation in China.
Gate.io is an exchange platform that works with more than 20 crypto coins, one of which is Digix. It somehow targets the Chinese investors, especially before the regulations that were imposed by the Chinese government in fall of 2017. The company is based in the US, in the state of Virginia.
- Relatively low fees.
- Offers a wide variety of cryptocurrencies.
- an easy to use platform.
- Has a mobile application.
Some other exchange platforms that support Digix coins are Bittrex OKEx and HitBTC.
In a Nutshell
DigixDAO has captured the world’s attention with its outstanding performance and unique features. We hope this DigixDAO guide was helpful for you.
Make sure to visit our website and learn more about various cryptocurrencies, ICOs, trading platforms, wallets and a lot more. Thank you for reading and hope to see you next time.