Homework task 7 by professor @yohan2on stable coins Digix (DGX)

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Hi there, thanks to @steemitblog for such an amazing initiative to keep #steemtians engaged, will be completing my homework task 7 by professor @yohan2on.

Although there are multiple advantages in the use of stable coins in the crypto market it also has its limitations here a few limitations in the use case of some stable coin.

High market cap with low investment returns ( RIO )

If you are an investor or a crypto trader you will probably observe that when there is much movement in let's say BTC most analysts will correlate the movement of BTC with market changes from stable coins you will hear them say stable coins are being moved and exchanged in some exchange platform.
With these, we can say stable coins play a vital role in the market capitalization volume of most crypto pairs also most pairs listed in exchange platforms are paired with a stable coin which gives us additional insight into how significant a stable coin is when it comes to making difference in crypto market cap.
Although these high market cap caused by stable coin a trader or investor who chooses to hold a stable coin as an investment asset will not expect much return or pump in his stable coin since they only maintain a 1:1 value with dollars.

Digix (DGX)

Digix token is an ethereum blockchain-based token that can be redeemable for physical gold, the idea is to store physical gold issued on the ethereum blockchain as an exchangeable or tradable token.
Like other stable coins pegged with the U.S. dollar, digix (DGX) is also pegged with a gold micro-unit bar which can allow investors to buy a micro-unit of gold bar in cryptocurrency token.

The company is based in Singapore traders and investors from different regions can be able to buy and trade DGX token where 1 gram of DGX represents 99.99% of LBMA standard gold there are millions of transactions process by the company and also to make and stabilize transactions among investors transactions fees are maintained at 0.13%

There are currently two tokens on the DigixDAO blockchain which are DGD and the DGX users can claim or exchange for the DGX token when they buy the DGD token.

Why Digix (DGX)

It might seem quite hard for an average investor to hold physical gold among his asset portfolio with the help of Digix a digital gold platform using the ethereum blockchain an average investor can be able to buy or accumulate some amount of physical gold that is equal in value with digital currency.
With DGX you can start managing your physical gold in your wallet.

Conclusion
Having the idea of pegged physical gold is a good initiative as it gives investors the flexibility to participate in gold-based investment and holding.
Although there are some limitations when it comes to handling the gold market as being a valuable asset commodity there can be middlemen interfering with the price fees although for the case of digix a fixed transaction fee for making transaction has made easier for an investor to trade on the platform exchange.

Thanks for stopping by.

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