Finding a stable store of value in the cryptocurrency world is a lot more difficult than most people believe. Most cryptocurrencies are inherently volatile, yet efforts are underway to combine the best of cryptocurrency with stable assets. The DigixDAO is a very interesting project in this regard, as it is a Distributed Autonomous Organization which resides on the Ethereum blockchain. There is a lot to this project; that much is evident.
Why Does DigixDAO Exist?
The concept of a distributed autonomous organization doesn’t have the best of track records. This became incredibly apparent once The DAO got hacked several times and the Ethereum blockchain had to be rolled back by the developers to undo all of the damage. The DigixDAO is, by default, the first successful DAO on the Ethereum blockchain. They raised US$5.5 million in an effort to decentralize the future and introduce a new stablecoin. It seemed like an ambitious project at first, but significant progress has since been made.
How Does DigixDAO Work Exactly?
The first order of business for the DigixDAO was to introduce a new stablecoin. A unit of exchange which allows for storing value over time was not present until a few years ago. The Digix Gold Tokens – or DGX – represent value on the blockchain which will be retained over time. This token is compatible with Ethereum smart contracts, and DGX will eventually be used as a payment tool using NFC technology. This particular token is advertised as the future gold-standard for value exchange in the Ethereum ecosystem.
Every DGX token represents 1 gram of 99.99% LBMA standard gold, which is secured in Safehouse vaults. It is possible for users to redeem 100 DGX tokens in exchange for 100 grams of physical gold. This process can be completed in person or via mail, which is pretty interesting. Another feature is on-chain proof of auditing, with no fractional reserves. For anyone looking for a relatively stable digital asset, DGX is certainly worth checking out. There is also the DigixDAO token, which lets holders claim quarterly rewards based on the total DGX collected through transaction fees.
To adhere to the true nature of a DAO, the DGD tokens can be used to pledge toward DigixDAO proposals. This is not a stablecoin, as it can be traded across exchanges, and 2 million DGD tokens are in existence as of right now. By combining the concepts of rewards, badges, and proposals, the DigixDAO could become a major project a lot sooner than people may think. That being said, the governance model of this project is still undergoing careful planning and development. A lot of big things are yet to come; that much is evident.
What Comes Next for DigixDAO?
As is the case with any blockchain-related project, there is still a lot of work to be done for the DigixDAO team. A final draft audit report will be presented to the public soon. Once this audit is made public, the launch of DGX 2.0 will take place in the next eight weeks. The team’s suite of smart contracts is currently on the Kovan public testnet and awaits further feedback from the community. There are also some new partnerships to take into account, which can only be considered a good thing. It will be interesting to see how DigixDAO evolves over the coming months.