Crypto Academy Week 7 - Homework Post for [yohan2on]- Digix- Gold in your crypto Wallets. Stablecoins Part 2...

whitestallion (72)in SteemitCryptoAcademy • 3 years ago (edited)

Introduction
Hello guys and welcome to the second assignment task of the second class on stablecoins, today we will be talking about a special type of coin, it's not a regular or famous type of stable coin but it's a very great coin.

Today we will discuss about a special type of stablecoin that is pegged to the value of a physical underlying asset. It's not pegged to the USD nor cryptocurrencies but is pegged to the value of 1 gram of Gold.

Let's talk about Digix....

Digix- Gold in your crypto Wallets

Digix is a gold-tethered cryptocurrency platform created by DigixDAO. Digix leverages blockchain technology and tokenization of underlying assets to mint and maintains its gold supply. Digix stores and secures physical gold bars, issuing an Ethereum-based ERC-20 stablecoin cryptocurrency token known as DGX in its place where every DGX token represents 1 gram of solid gold. Digix makes it very easy for its customers and even the unbanked to actually own and spend gold anywhere in the world which is possible using the DGX tokens tethered to 1 gram of Gold.

Digix operates in a similar way as every stablecoin does, it provides stability and is tethered to a reserve supply held in a vault in Singapore known as The Safe House. The vault has a maximum capacity of more than $2 billion worth of gold bullion, but if demand calls for a greater amount Digix is prepared to open a second vault to accommodate the growing demand for DGX tokens where 1 DGX is equal to 1 gram of gold stored in the vault.

How is DGX able to maintain its stability since it not backed by a stable fiat currency like the US dollar?, Unlike USDT DGX is backed by a physical store of value-Gold which has proved to be a reliable safe-haven asset over the years, so the idea behind the DGX token like every stablecoin is that tying the 1 unit of the token to the value of 1 gram of gold will assure its stability and conservative trait of gold as a safe-haven asset.

Digix Introductory Video

Proof of Provenance (PoP) Consensus Mechanism.

Proof-of-provenance (POP) is a protocol developed by Digix team as means to introduce and mint new DGX in a proportion of 1 unit to 1 gram of gold by proving evidence of the gold in the vault. The system is designed to provide transparent evidence of the gold in the vaults so investors would be convinced that they are not buying some magic and intangible gold unaccounted for somewhere in Africa.

Digix Proof of provenance protocol

So to track the existence and supply of gold in the vault a POP mechanism is set in place to track the chain of supply all the way from the bullion supplier to the storage vault here the gold is stored and equivalent DGX tokens are issued in proportion to the gold, received. This is proved through documentation which is uploaded in the Interplanetary File System (IPFS) and the Etherum blockchain to ensure transparency, this information is visible to all using the Etherum blockchain, it can also be confirmed using the Digix blockchain explorer.

Digix Asset Explorer

This process ensures that every DGX token minted is 1 gram of gold bar added to the vault and all documentation uploaded, some of the information uploaded include the following-

Time Stamp of creation.

SKU of the gold bar from Digix Marketplace (Unique ID number of product)

Bar Serial number

Chain of Custody digital signatures (Vendor, Custodian, Auditor)

Purchase Receipt

Audit Documentation

Depository Receipt

Storage fees due1

After solid documentation of the Gold stored in the vault and uploaded in the Etherum blockchain, smart contracts running on the Etherum blockchain mints DGX tokens in proportion to the gram of gold newly acquired and stored in the vault. To understand what this means let's work with this scenario

Step	Process
1	500g Gold is supplied to the vault and verified using the POP system to prove its existence on the Etherum Blockchain
2	New DGX tokens are minted in proportion to 1 DGX token to 1 gram of gold, in this case, 500DGX tokens are minted and supplied to users.
3	New DGX tokens can also be swapped and change for real gold, using the same ratio of conversion.
4	You can have your gold delivered to you depending on your country of residence.

You can set up your Digix account in just 5 minutes using the link below
https://digix.global/

Digix is honored to be the winner of S&P Global Platts Precious Metals Industry Leadership Award 2020.2

Benefits of Digix

DGX is a stable store of value.

DGX is a stable store of value tied to the value of its underlying asset which is a time-tested safe-haven asset. Gold is undoubtedly the oldest safe asset and a perfect hedge asset against the rapid volatility of the crypto market. In a practical sense, you are holding Gold in your portfolio.

Ease of Acess and Spend.

DGX bridges the limitation of holding gold, limitation like the cost of storage, Portability limitation and the issue Divisibility. DGX bridges this limitation as a cryptocurrency that offers ease of spend of your DGX tokens or in a sense Gold. DGX is listed on popular payment wallets, Xwallet by PundiX, and Monolith VISA card, making it easy for you to spend gold over 6 million locations globally.

Security

DGX is 100% secure and protected by cryptography and a transparent mechanism (Proof of Provenance (PoP) that offers an untampered logistic record of new golds added to the vault which can be assessed by DGX holders using the blockchain explorer.

Ease of Gold Ownership

DGX is one of the easiest ways to own gold even for the common man all you need to have Is just a single DGX which 1 gram of gold which is redeemable for solid gold and can be delivered to you anywhere in the world. DGX is also listed in many exchanges like uniswap, kyberswap, hobbit, and other top exchanges.

DGX allows move gold anywhere in the world effortlessly, you don't have to worry about absorbent fees involved in moving or storing golds.

Conclusion

Digix is no doubt a unique project aimed at revolutionizing gold ownership using blockchain technology and asset tokenization, making it the easiest and most convenient way of buying gold. Digix is secure and subject to transparency public test using the block Explorer of the project. So if you want to have some gold laying around safe in a vault all you have to do is buy DGX.