As the crypto market ramps up, there is a relatively silent token that continues to be strong and something that blends the old, with the new, based out of our home country of Singapore!
If you have been listening to the commentary within the crypto space, one of the most common 'pot shots' taken is the question; ‘what are crypto tokens/ blockchain's backed by?'
Well this little nugget of a token is literally made for those who cannot wrap their head around the blockchain space. DigixDao (ticker name DGD) is a dap built on the Ethereum network (we will address why this is great news for Eth and the network in another article). In a nutshell - Every DigixDao is supported by physical gold.
That’s right, we are not talking cryptography and more tokens you cannot see or hold, this is the real, undeniable gold!
The story does end there, the DigixDao token holds 0% in fractional reserves (unlike banks) and every DigixDao is held in physical goal bullion held at the Singapore based gold depository and on-call if you wish to receive the physical gold in place of your token.
Adding to the safety element and efficacy of this token, Digix has pioneered a unique 'proof of asset protocol' which means that:
- The gold is verified and holds its own unique certifications
- There is 3rd party auditing of holdings
- You can actually trade the token and recieve delivery of physical gold
So why is this important and what is the opportunity?
For anyone following gold, the price has been very suppressed. In fact, many ‘gold bugs’ such as Peter Schiff continue to tout that the inevitable fiat dollar crash is inevitably on the way and gold as a store of value is the only safe haven. Given how the DigixDao token works (as outlined above) even the most staunch gold asset bulls, would have to agree that this token is the easiest and perhaps the safest way to onboard into the gold market.
From a speculative position below are two charts for comparison. The first is the 5-year gold chart and second, the 5-year chart of the total cryptocurrency market.
It is certainly clear to see that specifically over the last year, the best asset class to have held investments in was cryptocurrency, however as the market expands and bubble talks continue the Digix token becomes very interesting. We are talking about blending the following key elements:
- The best aspects of blockchain technology, as far as the decentralized nature, immutability, easy onboarding, lightweight (specifically in reference to carrying physical goal in your pocket) and speed of transactions both in using the token as a payment method and also entry in and exit out of the market into other assets
- The historic value and aspects of gold, which over history has continued to prove its value, not just as in a store (like bitcoin), but also as a utility in many products that are currently produced and used
DigixDao could be a fantastic way for you to buy, store and hold physical gold, represented in a tokenized, format. In fact we feel that the DigixDao token once fully understood will be considered a ‘safe haven’ in the crypto market and used similarly to how USD tether works, as a pivot for buyers to move in and out of token trades. If exchanges like the idea of a gold backed token to become a pivot (such as how Bitcoin and Ethereum are used currently on many exchanges), DigixDao's legacy will be minted firmly in blockchain history.
Time will tell if DigixDao lives up to its golden potential. When we see a big rise in physical gold, it will the test to see how this blockchain is positively impacted by physical gold gains. One thing is for sure - at a 2million total circulating supply of DigixDao tokens, the potential for this to become one of the most valuable crypto tokens is very high as droves of customers hedge holdings for the Digix token.
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