Digix: Gold-Backed Ethereum Smart Contracts for All

Gold-backed Ethereum token offering Digix (sale.digix.io) has completed its crowdsale, opening up decentralized gold-backed smart contracts to anyone.

Also read: Ethereum DAPP Community Currency Creates New Financial Ecosystems

Smart Contracts for All

The democratic autonomous organization (DAO) achieved over $5.5 million USD funding in 12 hours upon the start of the crowdsale on March 30. Now, along with the launch of trading later this month, developers will work on expanding the project according to the will of token holders who participated. Token holders will in return for their participation receive a portion of transaction fees.

“Everything that goes into our project gets voted upon by the Digix DAO token holders. And everything about that would be coded on the blockchain as a smart contract,” co-founder and CEO Kai Cheng Chng told IB Times prior to the crowdsale taking place.

Digix (digix.io) marks the first major crowdsale to close on the Ethereum blockchain. Demand was seemingly unprecedented, with Chng setting a preliminary minimum target of just $500,000.

Its popularity also signals the rise of so-called dapps (decentralized applications) built using Ethereum to enable anyone to perform secure transactions using smart contracts.

“The thing with all digital gold systems, they are all being made in a privatized, centralized manner; their APIs feed directly back into the service of the digital gold company,” Kai continued. “Whereas in the case of building on Ethereum it’s just available for everyone to use since we are using the same standard token API that makes any digital assets on Ethereum tradable.”

Digix: Paying with Gold

Digix itself represents the creation of digital gold tokens with the added transparency, which hampered similar initiatives such as e-gold ten years ago. Digix tokens are each representative of 1g of real gold, with information regarding reserves maintained on proof-of-asset cards in a decentralized database.

Tokens are divisible into as tiny an amount as 0.0001g, allowing the entry barrier for gold purchases to be significantly lowered while retaining access and security integrity. The amounts at hand even permit the use of gold as a payment method. The company’s whitepaper concludes:

Digix will provide a transparent, audit friendly, safe protocol that leverages the full potential of Ethereum’s decentralized consensus ecosystem and IPFS [interplanetary file system] to facilitate crypto assets on the blockchain.

Meanwhile, DigixDAO trading will officially launch on OpenLedger on April 28. Ronny Boesing, CEO of crypto exchange CCEDK, OpenLedger’s Danish Registrar, said in a press release that the move will seal the flexibility of Ethereum-based consumer offerings.

“Ethereum is fantastic, but it wasn’t designed for fast, decentralized asset trading… If Ethereum and DGD provide the means of minting digital gold, OpenLedger provides the perfect market on which to buy and sell it.”

What’s your take on the potential of Ethereum DAOs and gold-back cryptocurrency? Get involved in the comments below!

Images courtesy of pando.com, digix.io