DigixDAO is a Decentralized Autonomous Organization (DAO) built on the Ethereum platform that tokenizes gold and other physical assets. The DigixDAO platform provides a transparent and secure protocol for leveraging Ethereum’s consensus system and permanent document storage (IPFS) to create transferable digital assets on the Ethereum blockchain.
DigixDAO was created by DigixGlobal to function as a platform for trading tokens backed by gold. The Singapore-based company will store physical gold for each token issued on the Ethereum blockchain. DigixDAO features two native tokens:
Digix Gold (DGX) – the core product of DigixGlobal. It is minted using a smart contract and is backed by the value of gold. One DGX token is equivalent to one gram of gold, which makes it a lot more stable than most cryptocurrencies. DGX represents value that can be retained over a long period of time with relatively little volatility.
DigixDAO (DGD) – this was the token sold during the DigixDAO crowdsale in March 2016. There are only 2 million in existence and 85% is held by supporters of the DAO. DGD holders receive a pro-rated share of the transaction fees on the DGX network, denoted in DGX tokens. Transaction fees are 0.13% of the balance sent.
DigixDAO Value, Market Cap and Volume
The DigixDAO crowdsale was meant to run for one month, but it reached its upper limit of $5.5 million USD in a record breaking 12 hours. DigixGlobal plans to use the crowdsale funds on projects that help increase the adoption of DGX.
There are only 2 million DGD tokens in circulation, and its scarcity has made it a valuable commodity. Its market cap crossed $100 million USD by mid-2017 and has remained high ever since.
How DigixDAO Works
DigixDAO uses a proof-of-asset (PoA) protocol to let users track physical assets as digital tokens. Using PoA asset cards, users can track all of the information that represents physical assets, including the asset’s serial number, the purchase receipt, audit documentation, time stamps, and a chain of custody containing the digital signatures of the vendor, custodian, and auditor.
The PoA protocol uses the InterPlanetary Files System (IPFS) to securely and permanently record all the sensitive information. This is important because it means that users can’t create individual PoA asset cards without an audit trail of the asset. Additionally, the three parties (vendor, custodian, and auditor) that digitally sign every asset card must be verified using proof-of-purchase receipts.
Users who want to exchange PoA asset cards can do so using a recaster smart contract that automates the process. DigixDAO also features a redemption process that allows users to redeem PoA asset cards for gold. Since DigixDAO is built on top of Ethereum, PoA cards can be securely stored in wallets that support Ethereum-based assets.
DigixDAO (DGD) vs. Other Cryptocurrencies
The fact that DigixDAO’s core token is backed by the value of gold makes it a unique cryptocurrency. By tying itself to such a stable store of value, DGX is arguably the least volatile crypto asset on the market. Each token represents one gram of actual 99.99% LBMA-standard gold that is secured by DigixGlobal at a safe house in Singapore. Storage fees are charged at 0.39% per annum and holders can always redeem 100 DGX for 100 grams of physical gold from DigixGlobal at any time. It is also worth noting that DGX is the future gold standard for value exchange in the Ethereum ecosystem.
DigixDAO implements an interesting decentralized self-governance model. DGD holders who bought over $15,000 USD worth of tokens during the crowdsale received a special proposer badge that allows them to submit proposals to the DAO. Once proposals are approved by badge holders, all DGD holders are welcome to vote on whether to accept or reject the proposal using an on-chain ballot.
Buying, Storing and Selling DigixDAO
DigixDAO can be acquired from several cryptocurrency exchanges. The most popular places to buy DGD include Binance, Huobi, OKEx, Liqui, HitBTC and Gate.io. Huobi and Binance have the highest daily trading volume of DGD. As an Ethereum-based token, DGD can be stored on Mist, Parity, EthereumWallet, and MyEtherWallet. Hardware wallets like Ledger Nano S and Trezor also support DGD.
Liquidity of DigixDAO
DigixDAO’s low volume made it a valuable asset right from its launch. Its price reached as high as $30 after the crowdsale, but tanked once the hype started to die down. Like many cryptocurrencies, the value of DGD shot up during the second quarter of 2017 and has maintained an upward trajectory into 2018. DGD’s price reached over $200 at the beginning of 2018 and is showing no signs of slowing down. Its future is primarily tied to the success of the DGX gold system, and that has helped it maintain good market liquidity.