DigixDAO project purpose and description
WHAT IS DIGIXDAO?
DigixDAO is an Ethereum based platform that is backed by real gold. DigixDAO stands for Digix Decentralized Autonomous Organization and as the name suggests, it aims to decentralize buying, selling and storing of real gold with the exclusion of middlemen.
It is an organization that makes the buying and selling of real gold easier and more efficient through the use of a digital token. This means that Gold is stored somewhere in a vault and is represented on the digital space by a token.
Each token is worth a particular gram of gold. The token is given to investors as a proof of ownership. This platform is a product of Digix Global Company and it aims to increase the liquidity of gold thus giving investors an alternative of taking advantage of gold with minimal volatility and also being a beneficiary of the crypto ecosystem.
DigixDAO runs a double token system named DGX token and DGD token with both performing two different but important functions.
DGX is the actual token that holds value for a corresponding amount of gold. It is that which we can refer to as the gold invested token. This token is what is given to investors as a proof of gold which can be redeemed anytime by the investor in question.
DGD token on the other end is an administrative token of which the platform is governed by. If in possession of this token, the power to vote and to make other decision is vested on you. These individuals determine the fate of the ecosystem. Because of their labor, they are given DGX token as a reward.
The DigixDAO platform operates on a Proof of Asset or provenance algorithm. This algorithm is saddled with the responsibility of tracking the gold from the supplier to its final destination –the safe house.
The tracking process is done in a secure and transparent way through the use of the private keys and the documents sent to the blockchain and Inter Planetary File System (IPFS). This way, the database is kept secure, immutable yet decentralized.
The proof of asset creates what is called an asset card to be verified by the three participants of the platform – vendor, auditor, and custodian. The asset card is the only way a DGX token can be issued and it is always found in the Ethereum wallet.
WHAT IS THE PROBLEM THAT DIGIXDAO SOLVES?
The digixDAO aims to solve two major problems and they are volatility and centralization.
The major issue with most cryptocurrencies is that price cannot be determined as a result of high volatility. As a result, investing in these coins is rather very difficult since it is not backed by any stable or historical value.
For instance, most coins just exist on the digital world and as such, its value depends on its wide adoption, press, government, etc. making it difficult to give a specific value to it knowing fully well that it could change in minutes. This has scared many investors from participating fully in the blockchain and crypto world because they prefer the traditional options they have to invest in a coin that has a short-term value.
The platform aims to eliminate the possibility of a centralized system which befalls a lot of other cryptocurrencies. Most cryptocurrencies have the tendency of becoming decentralized due to the fact that the coins have to be mined or staked.
The individual who has a larger percent of the mining pool or stake can determine the fate of the platform if care is not taken. Again, this is due to the fact that these digital coins are not backed up by any asset. They just exist on there own, hence, they have to generate more which demands the participation of users of the platform.
HOW DOES DIGIXDAO SOLVE THE PROBLEM?
DigixDAO solves the above-listed problems by backing up its token with gold. When a token is determined by an asset like gold, there would be no possibility for volatility and as such, investors would be encouraged to participate in the platform. A token worth an amount of Gold and vice versa.
This implies that the value of the token is not just dependent on factors like wide adoption or government but on a physical asset – gold which has a historic and a stable value.
To deal with the possibility of centralization, the platform has employed the use of an algorithm called the proof of asset.
The Proof of Asset is responsible for tracking down gold between the three levels of custody with the help of the blockchain technology and Inter Planetary File System thus ensuring public and open verification of transaction. Also, the asset cards created by the proof of asset contains documents like Time Stamp of card creation, SKU of the gold bar, Bar Serial number, Chain of Custody digital signatures (Vendor, Custodian, Auditor), Purchase Receipt, Audit Documentation, Depository Receipt, Storage fees due that acts as Proof of purchase and uploaded into the smart contract in exchange of DGX Token.
This way, there is no dependence on the users of the platform to do a specific work or stake a particular amount and get rewarded. This further limits the possibility of a centralized system.
WHAT MAKES DigixDAO BETTER THAN ITS COMPETITORS?
DigixDAO possesses several merits over any other cryptocurrencies due to its exceptional features that stands out among all others. By a very far margin, DigixDAO platform could boast of its unparallel features such as:
- The platform possesses a high level of transparency which allows it to function even without the presence of a user. This feature coupled with its ability to closely monitor any transaction all ensure that Digix tokens can be involved in transactions with maximum track down and to vet every single process leading to a purchase of assets.
- Proof of Asset: This is indeed quite a remarkable feat in the history of blockchains and cryptocurrency platforms. Several other platforms utilize the system of rewarding work done as a result of contributions of CPU power. DigixDAO, however, utilizes the system whereby an asset card is created to serve as an evidence of a transaction has taken place. This has never been implemented by any other platform prior to this great innovation. Important details as touching the transaction and the individuals involved are expressly specified on the card. This way, there is no possibility of centralization.
- The sophisticated keeping of records on the ledger also assists in reducing and even much more eradicating errors that could have been introduced into the transaction. This enhances the security of the system, together with the smart contract feature that is devoid of operation error.
- DGX tokens are quite easily transferred from one transacting party to the other. In the same vein, the tokens are safely kept and preserved in Ethereum wallets. Digix has a safe vault that is responsible for storing assets, valuables and properties which are represented in the digital world as tokens.
- A complete sense of ownership: Users and holders of DigixDAO have the liberty of monitoring whatever happens during their transaction. The records of sales and purchases are available to the individuals involved in the transactions themselves. This is a major factor in having a very secure platform for their transactions.
- The log-in into the platform is not done via the website form. Each participant has to download the clients from Digix. This provides an advantage of having a reduced chance of attack as compared to the old system of web sign in.
HOW CAN DigixDAO BE CATEGORIZED?
DigixDAO can be put into different classes owing to the outstanding purposes and features that it has. The categories of DigixDAO include:
- Digital Currency:
Each blockchain network has their own distinctive cryptocurrency that is employed in its operation and in carrying out all sorts of transactions. Purchase of assets and valuables, as well as storage of assets, are all conducted in the form of Digix tokens being the currency of exchange and trade on DigixDAO network. Also, without this currency, the benefits of the platform cannot be extended to nonusers
- Gold backed:
DigixDAO cryptocurrency is made such that it tokenizes gold and as such can be rendered in terms of its equivalence with gold. That is to say, every token on the platform has an amount of gold it represents in the real world making the token valuable. This way, the value of the token is only affected by the gold itself and nothing external.
Everyone in possession of the DGD token gets to monitor the affairs of the platform by being vested with voting right and decision making rights. This is not like other platforms where this role is played for the creation of more coins but the better functioning of the system. However, the work done here is rewarded by giving these individuals a certain amount of DGX token gotten from investors for the maintaining of the platform.
WHAT IS DigixDAO’s VISION ON SECURITY?
Like any other cryptocurrency, the main and central focus remains security as transactions are carried out digitally.
Several other blockchains have a defence mechanism that prevents an attack on their platform. DigixDAO is no exception as it even boasts of a rock solid security system that has immunity against any form of attack.
In the bid to fully ensure the security of every individuals and more importantly that of assets and valuables, Digix has put into place proper and detailed vetting of each and every processes involved in a transaction. This even has led to the distinctive creation of a card that shows and affirms that a transaction has been completed.
Other processes such as the conversion of the asset card to tokens are well monitored all in the bid to ensure maximum security of all transactions on its network.
DigixDAO has a relentless pursuit of securing its network heavily which is why the Smart contract feature was incorporated into its features.
The smart contract allows for proper monitoring of all that each transaction involves. Shares, transfer of assets and storage of valuables as well are all closely examined using Smart Contract.
This has been quite successful in that errors by humans in the process of transacting have been greatly reduced, as well as the risk of fraudulency has been eliminated.
EXAMPLES OF DigixDAO’s USE CASES/APPLICATIONS.
The use cases of Digix blockchain is quite vast and numerous. Its several features are employed in several cases ranging from security, finance, and its digital security framework and a whole lot of other applications. Examples of such applications of DigixDAO blockchain platform include the following:
- Contact generation that Digix offers allows for the development of applications that make use of the card that shows the evidence of the completion of transactions. Other applications make use of the Digix token for developing applications and also for keeping records of logs and analysis.
- Transfer of values and assets can be carried out as allowed by Digix system. Wealth and values of assets can be transferred in the form of crypto assets and deposited in the Ethereum wallet.
- Escrow: Tokens offer more platforms for retaining and storing data and values For Escrow on Digix blockchain. An escrow refers to valuables and assets kept in the custody of a third party till specific conditions are met. Digix platform ensures that these valuables are stored and well guarded for as long as possible.
- Exchange of Crypto and applications that manage Wealth: The combination of Digix crypto with applications that manage wealth and assets result in a reduced level of debts or risk involved in any transaction. Financial profiles are better managed with the incorporation of Digix blockchain.
- Lending between peer-to-peer: Digix Gold can be utilized on some applications for lending between partnering individuals. An individual can place a request through the application for a particular amount of loan, and dialogue the rate of return or interest to accrue on the loan. Failure to pay on time would warrant a penalty on the borrower. The stability of the Digix Gold Token would be able to bear the implementation of this kind of service.