As of June 18th, US EST night, the DigixDAO cryptocurrency (DGD) continues its’ long-term appreciation. DGD represents a significant effort to provide a stable coin. The Digix ‘decentralized autonomous organization’ (DAO) has recently launched their DGX cryptocurrency, which is backed by gold.
The crypto market recognizes the importance of this project, which is expected to provide the much-needed price stability in this volatile market. The below chart depicts the steady increase in the price of DGD over a two-year period.
What is DGD?
The Digix DAO works in a democratic manner to guide developments in a project that has developed a cryptocurrency backed with gold, and that’s where the importance of the organization lies. It works based on an Ethereum smart contract where the DGD token holders are the participants.
The DGD token allows the participants to vote and collectively decide the priority of projects. The organization has voted, prioritized, and overseen the development of DGX. It will continue to oversee the developments regarding DGX, including future enhancements.
The importance of DGX, i.e. the flagship project of Digix DAO:
DGX was conceptualized to address two significant use cases:
- We all know that gold has been a reliable investment for centuries now. The global valuation of gold stands at US $ 8 trillion. Despite its’ popularity, the common people find it difficult to invest in gold. While there are numerous ways to buy gold, losing money due to high transaction fees and involvement of scammers is common. Commoners also find it hard to store their gold in bank vaults, because banks either reject or charge very high fees unless the amount of investment is very high.
- The volatility of the crypto market is a common news. Cryptocurrencies are mathematical money with no tangible asset to back them. If you want to withdraw from the securities market due to a bear-run, and want to invest your money in cryptocurrencies instead, you don’t have much to assure you. Crypto market prices change every day, even every hour. There was no stable coin.
DGX, the flagship project overseen by the Digix DAO, addresses these.
How does DGX work?
Digix was founded in Singapore in 2014. The company had a very successful crowdsale of their DGD token in March 2016. The grand plan was to create a cryptocurrency backed with gold, and accordingly, DGX was launched in April 2018.
The company has the following partners:
- ValueMax Singapore: They are the vendors. It’s a public company that sells London Bullion Market Associate certified gold bullion bars.
- Bureau Veritas Inspectorate: They are independent auditors, and they check the quality and quantity of gold.
- The Safe House, Singapore: They are the custodian vault. They can store up to 30 tons of gold.
Digix DAO uses a ‘proof of asset’ (PoA) consensus mechanism, which works as follows:
- It records the possession of asset on the Ethereum blockchain, and issues a PoA asset card.
- The PoA cards are stored on the Ethereum blockchain, and they contain the following:
- Timestamp of card creation;
- SKU of the gold bar;
- Bar serial number;
- The digital signatures from the vendor, custodian, and auditor;
- Purchase receipt;
- Audit documentation;
- Depository receipt;
- Storage fee dues
- With the immutable PoA card, a smart contract creates DGX tokens. 1 DGX token is equivalent to 1 gram of gold.
- There are fees for storing and securing gold. There is also a demurrage fee of 0.6% per annum, and 0.13% transaction fee when transferring DGX to an Ethereum wallet.
The benefits of DGX coin:
I already mentioned the benefits of a stable coin and that of providing an easy way of investing in gold to the commoners. When DGX is established as a stable coin, many other possibilities emerge, making the prospects of the project very bright. For e.g.:
- Wealth inheritance: Long period of inactivity will trigger the Digix DAO network to automatically transfer your DGX to an heir’s wallet.
- The DGX token can be a stable store of value for Escrow services.
- The emergence of other stable coins is now possible since DGX can back them.
- A stable DGX will make it easier for lending and microfinance on the blockchain.
It’s clear from the above that DGX is likely to be a success. Now, DGD has a finite number, totaling up to 2 million coins. The more popular DGX becomes, the higher will be the demand for DGD. This is because many lucrative future projects will be on the table for the Digix DAO to decide upon. With a finite number of DGD coins, this points to a steady appreciation of DGD.
A price prediction for DigixDAO:
Experts consider DGD to be an excellent investment.
For e.g., the walletinvestor price prediction terms it an “awesome” long-term investment.
They expect that from its’ current price of US $ 114.052 as of June 16th, 2018, it will appreciate to US $ 683.024 in June 2023. That’s a 498.88% increase. DGD is indeed a good investment choice!