DigixDAO Crowdsale starts March 30th
DigixDAO Crowdsale starts March 30th
A Decentralized Organization Dedicated To The Growth And Advancement Of A Decentralized Gold Standard Economy For The 21st Century.DigixDAO is a decentralized organization established on the Ethereum platform. The goal is to build a 21st century gold standard financial platform on Ethereum.
DigixGlobal Pte Ltd spent over a year building its decentralized gold tokenization platform on Ethereum. During this period, we hosted various Ethereum based meet-ups, and other marketing and advocacy activities. We have been closely involved with the Ethereum Community since its inception and we fully believe in the vision of an Ethereum future.
We officially launched a working alpha platform on January 15th of 2016. The company privately-funded the development of its Gold issuance as we fully believed in the vision of a new financial system free from disjointed incentives between consumers and institutional investors.
Digix Gold tokens are gold backed Ethereum tokens on the blockchain that can be used by anyone to create lending platforms, payments processing, funding, or as collateral by virtual nations.
On the subject of virtual nations, Kai added: “New Dapps [decentralised applications] are coming up that involve trying to round up citizens from all across the globe, forming their own enclave, forming their own organisations.
“It would be great if they could back up some hard assets with gold tokens. This is something that being on an open platform like Ethereum could help propagate. The thing with all digital gold systems, they are all being made in a privatised, centralised manner; their APIs feed directly back into the service of the digital gold company.
“Whereas in the case of building on Ethereum it’s just available for everyone to use since we are using the same standard token API that makes any digital assets on Ethereum tradable. It just opens up a wide array of things that you could do with the gold tokens without our control, so to speak.”
DigixDAO earns its revenue through transaction fees of Digix Gold Tokens. Transaction fees are 0.13% capped at 1 gram of gold per transaction. There will be a lifetime supply of 5 million DigixDao tokens (DGD), of which 500,000 DGD tokens denominated in USD (actual price tba) will initially be offered to the public in a 2 week window.
End users who hold on to DGD tokens will be able to earn transaction fees perpetually from DGX gold tokens pro rated to the 5 million tokens in existence. Revenues are disbursed autonomously as DGX tokens after every quarterly audit. DigixDAO’s source code will be publicly available at Ether.Camp.
Not only do you earn revenues perpetually, DGD token holders get voting rights on feature requests and updates at Digix so that Digix can better prioritize on what the community wants.
Just to give you a sense of potential and scale for what we do, the annual volume formerly at Egold at its peak was 2bio spends per year. If we supported this project together, we can speed up developments at Digix and achieve an even greater volume on Ethereum, forming the right partnerships, and at the same time having profits go back to users who support Digix and the platform. Our platform also uses the standard token API, which means that any Dapp developers, from a merchant accepting DGX to bitnation-type movements on Ethereum everyone can have free access to our gold tokens for their own intentions and purposes.
Eventually, we hope to be able to release all 5 mio tokens to the public, and turn DigixDAO into a true revenue sharing organisation for anyone who believes in having digital gold on Ethereum. Digix employees will just be working for the community and the DAO.
So this is not so much like an equity stake, but more like an annuity. We are buying a revenue stream at a fixed price that pays perpetually quarterly. Let’s think about the valuation though. You have 5,000,000 tokens right now at 0.5 Eth each, so that’s a baseline valuatoin of 2.5MM Eth. As of this moment ($4.15), that’s a $10,375,000 valuation on that revenue stream. So putting aside the time value of money and other lost opportunities, at 0.13% fixed tx fee (but with a cap,,,) you would need to see at least $7,980,769,230 in transactions to reach the break even point That’s a lot. To put it into perspective, the total daily trading volume of GLD (the biggest gold ETF) is about $157,000,000, or 50x larger.
Now, you have to discount for the time value of money. And you’re paying in Eth which in time will be a dividend paying asset as well under POS. It’s hard to gauge how much that revenue stream from Eth will be worth, but it would need to significantly outstrip the value of the digix shares in my view because Eth has underlying currency value (at least currently).