DigixDAO's digital gold asset to trade exclusively on OpenLedger

Tuesday 12 April 2016

After a blockbuster sell-out ICO last month, DigixDAO trading will shortly be launched on Bitshares 2.0 platform OpenLedger.

The desire for gold runs deep in human nature. For thousands of years the shiny stuff has been used as a store of value and means of transacting. It fell out of favour as a currency around a hundred years ago in most countries, and the gold standard has become a thing of the past. But that doesn’t mean gold is no longer popular: quite the opposite. In troubled economic times, gold is the asset that investors turn to in order to protect their wealth.

This appreciation for gold is one of the factors that powered DigixDAO through its stellar ICO. The company raised $5.5 million in just 12 hours for its gold tokens initiative. Running on the Ethereum blockchain, the company will facilitate the ‘minting’ of tokens that each represent one gram of gold, securely stored and audited by an established vault gold company.


Gold and other assets on the blockchain are going to be a major use case for crypto

It’s a variation of the representative money principle that the US used until the 1930s, and the 'digital gold' that is available today. But there are crucial differences, which come down to the nature of the blockchain. These DGX tokens can be sent anywhere in the world and are divisible down to 0.001g – lowering the entry barrier for gold investment, and even allowing individuals to pay each other with gold online. (Critics often compare the crypto world to the Wild West, so perhaps it’s appropriate that crypto users would want to transact in gold.) A proportion of the transaction fees from these transfers will be paid to DigixDAO owners who hold the DGD token in their Ethereum wallets. However, Ethereum is a smart contracts platform, and is not designed for the rigours of the modern marketplace. That’s where OpenLedger comes in.

OpenLedger plus Ethereum: the best of both worlds

‘Ethereum is fantastic, but it wasn’t designed for fast, decentralised asset trading,’ comments Ronny Boesing, CEO of crypto exchange CCEDK, which is OpenLedger’s Danish Registrar. ‘OpenLedger was created with exactly that in mind. Transactions process in seconds. It’s fast, secure, reliable and transparent. If Ethereum and DGD provide the means of minting digital gold, OpenLedger provides the perfect market on which to buy and sell it.’ Ethereum is one of the many other crypto coins that can be traded on OpenLedger, along with BTC, LTC and a range of pegged fiat equivalents such as BitUSD.

In an exclusive arrangement, Digix and OpenLedger have hammered out a strategic partnership that benefits both, playing to each of their strengths. From April 28th, OpenLedger will start listing Ethereum assets, including DGX gold-backed tokens and DigixDAO (DGD) tokens, which represent a share of the revenues generated from transfers of DGX.

Bridge to the real world

The collaboration is one that we’re likely to see more of in the coming months and years. No blockchain is perfectly suited to everything, so it makes sense to specialise - as both Ethereum and OpenLedger have done - and then partner to leverage the benefits of both.

In this instance, both companies hope the arrangement will serve as a means of bringing two different worlds closer together: that of blockchain-based representative tokens, and of physical assets housed in the real world. ‘What you are seeing here is a democratisation of the investment industry,’ explains Boesing. ‘Previously, it would often be prohibitively expensive to buy small amounts of gold – certainly physical gold of which you actually took receipt in person. And even if ordinary investors were able to buy paper or regular digital gold without getting hit by fees, transferring it to another person is fraught with difficulties and costs. OpenLedger means you can buy and send someone a fraction of a gram of gold, without worrying about spreads or transaction fees or delays or ownership records. It’s incredible that almost a century after most of the world came off the gold standard, we now have the means to use gold as an effective payment mechanism once again – not as a new gold standard, but as one of many parallel currencies on the blockchain.’

DGX can be redeemed for physical gold, and anyone who holds enough DGD can use it to vote on strategic decisions and funding allocation for DigixDAO.

Getting started with OpenLedger and OBITS bonus

Interested parties are recommended to familiarise themselves with the OpenLedger platform (starting with the YouTube channel) ahead of the launch of trading at the end of the month. Newcomers who register with OpenLedger and then trade DGD using this link can gain a bonus in OBITS, a token representing a share of profits in current and future projects on the platform, by contacting [email protected].

This article was sponsored by Ronny Boesing and CCEDK.

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