One of the most talked about & misunderstood topic in the online world is Blockchain technology which is taking the internet by storm. Blockchain technology is initially known to allow fast, secure, and transparent peer-to-peer transfer of digital goods that include money and intellectual property.
It was not very long before, users of the technology found other new and innovative ways of making use of the technology. The blockchain technology paved the way for what came to be called ‘Smart Contracts,’ and this has set the basis for the new generation of blockchain projects.
The advantage of smart contracts is anything that can be tokenized and a firm leading the project in the tokenization of assets is DigixDAO.
DigixDao which was founded in 2014, Singapore by Kai C. Chng, Anthony Eufemio, and Shaun Djie has created a token known as DGX and is associated with the tokenization of gold bars.
Reportedly, the value of a single DGX token is equivalent to 1 gram of gold in the Digix vaults.
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THE FUNCTION OF DIGIX :
One of the main functions of DIGIX is allowing its users to invest in gold, (literally online / virtually) without any fear of physically possessing the asset, thus eliminating the risk of theft or loss. Investors may purchase DGX coins virtually, and the same is stored in a vault referred to as The Safe House in Singapore. The DGX Coin is equivalent to 1gm of gold whose purity stands at 99.99% gold which is certified by the ‘London Bullion Market Association’ refiners.
Digix has proved to be beneficial for the bullion market as a whole and the investors in the bullion market. This is because it has always been difficult to trade bullion or transact in the market physically. Digix, on the contrary, has enabled its investors to transact in bullion more freely and securely using the blockchain technology, thus enhancing the liquidity in the market.
A smart contract generates a DGX token when the DigixDAO network records a new supply of gold. In other words, depending on how many grams of gold are received, the exact same amount of DGX Coins are issued via smart contracts.
It must be noted that Digix users are liable to two kinds of fees. The first is a transfer fee which is 0.13%. The transfer fee is charged for transferring DGX on the Ethereumblockchain. The other fee is an annual demurrage fee which is 0.6%. The demurrage fee is a sort of Account maintenance fee. However, the demurrage fee for new users is waived for the first year.
Users also have a choice of redeeming physical gold bars. However, this may be done in multiples of 100 grams and carries a cost of 1 DGX token.
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Reports suggest that the total DGX in circulation currently amount to approximately 88,100 coins.
In conclusion, it is important for physical assets to be tokenized and more importantly, more companies must enter into the game, just like Digix which has made the ownership of gold more easy and accessible.
