by Lumai Mubanga
In part one of this series, we discussed the future of blockchain-supported investments through Augur, a decentralized prediction market on the blockchain. In this article, we will consider another high profile Dapp known as Digix. Digix, unlike Augur, tokenizes Gold on the ethereum network. How did this initiative develop, and how may you get involved?
Gold – a preserve of the rich
For a long time now, gold has been a preserve of the rich and wealthy. Even in countries where it is mined, many gold mines are literally surrounded by so-called shantytowns that draw a vivid contrast between the rich and the poor. In many African countries where it is abundant, foreign corporations have taken over the ownership of these natural resources, leaving the indigenous gasping for fragments that gives them only a dollar per day to survive. Will the coming of blockchain overturn this unfortunate “survival of the fittest” syndrome?
Costing an average of $61 per gram and only available on world stock exchange markets, gold has been difficult to find, later on, to be bought by ordinary people. It is with this in mind that Digix decided to begin tokenizing gold on the blockchain to make it available to as many people as possible. How does digix achieve this seemingly insurmountable feat?
Gold as a token on ethereum
Glowing under the banner “Then future of owing Gold is digital”, digix dot global thrives on the promise to “create a world were 99.99% of fine gold bars are made divisible, transferable and redeemable” through tokenization. How does it achieve this feat in a world were owning precious and expensive assets has been dominated by corporate and powerful entities? Of course through tokenization but in a much more transparent and easier way.
What is the Cost?
Currently, these transactions are being supported through five cryptocurrencies namely Ethereum, DAI, USDT, USDC and PAX. Therefore, you need to own one of these asset-backed tokens and stable currencies to trade on the platform. Digitized Gold or digital Gold (DGX) is equivalent to one gram of Gold. One DGX is pegged at approximately 61USDT. USDT is a stable coin equivalent to one USD. The actual price is only fixed at the time of purchase because it is constantly updated in real-time per second. At the time of writing this article (November 2020), one DGX is equivalent to 61.611 USDT. You can trade this asset in any of the supported stable coins and ethereum.
That said, you can buy for example as low as 0.5 DGX at half the price or as lower as your pocket allows. The idea is to make fine Gold as divisible as possible to allow anyone to own Gold. This gives a chance to anyone to “micro accumulate Gold” using DGX tokens.
This has essentially removed the physical barrier of owning Gold in vaults located abroad. Your Gold could be held in a Canadian or Singapore vaults for 365 days, with 100% transparency to all buying processes as blockchain allows you to see all transactions in full. Just like all transactions on the blockchain are transparent, you can look at all Gold buying processes from anywhere in the world, at any time. To further allow for ownership, you can redeem your Gold.
Ultimately, what appeared impossible some years back has now become a reality. You can now own Gold affordably and for sure, “the future of owning Gold is digital”.
Is it for you? You are free to explore and benefit.