How GoldMint backs its assets?

The concept of 100% backed digital assets is not up to the minute with the emergence and rapid growth of new technologies. The volatility of the very first crypto coins in the market manifest the necessity to hedge the risks with a stable currency. Be it gold, dollars, mac laptops or pieces of arts, no matter what commodity or asset they are backed with, their value should stay in sync with the commodity’s price in the real market and that stays a prime challenge to achieve. The concept is not complicated but the latest efforts to bring the idea to life have not been widely adopted yet.

Cryptocurrencies have captured the imagination of many and thus, the idea of assets (other than money) backed digital currency is gaining more acceptance. While Gold continues to storm the global investment market, bringing it closer to cryptocurrencies will assure a trustworthy physical backing.

Digix, one of the most well-known stable currency projects, has recently posted an overview of the existing and upcoming solutions in the industry of tokenized gold. Having a complicated audit system, Digix ensures the transparency and the backing of their DGX tokens but the gold token has not been released yet and the capitalization of the company grows mostly due to the speculative price growth of DAO token. The emergence of DAO platform and a tokenized gold asset is a tremendous initiative as it ensures development of all the companies prevalent in the market. So, the new attempts to create digital gold asset were done but none of these have succeeded yet and encouraged the cryptogold which can be exchanged easily in the market.

GoldMint project is led by a team of Russian developers who have extensive experience in managing physical gold. LOT-ZOLOTO, a company founded by GoldMint’s CEO Dmitry Pluschevsky, has exceeded the trading volume of $10 million in March, 2017. The perfect understanding of the market provided the GoldMint’s team with an opportunity to develop a platform which is more than just digital gold asset blockchain. GOLD, digitized gold, and Custody Bot, a vending gold storage machine, are the two independent products of GoldMint that heralds a mark in the evolution of ‘smart contracts’.

GOLD backing: storage and audit

GOLD is backed by physical gold of 999 quality or ETF bought on the stock exchange NYSE Arca. ETFs are used as a backing instrument as they are a more portable and convenient instrument for storing gold value compared to physical gold. Still, the Company proposes to partly back the value of its GOLD by physical gold:

All physical gold owned by GoldMint exists in the following forms:

Manufacturer-certified bullions Gold coins Gold jewelry 999 quality granules, stamped by manufacturer

As stated in the White Paper, “Physical gold is locked-up in storage and rated according to its value:

All the transactions on deposing and withdrawing gold are confirmed by bank statements which are encoded by uploading relevant forms in GoldMint blockchain. These documents allow the system to check that GoldMint company owns the particular amount of gold.

The gold storage is regularly audited by an auditor from GoldMint and by any one of the TOP 100 audit company monthly.

For more information of Gold backing and storage, read GoldMint’s White Paper section 4.1.1. Gold Emission.

GOLD purchase and redemption

As you can see in the infographics above, the process of GoldMint purchase and redemption is quite simple and infuses KYC procedure. As soon as GOLD is sold, the digital assets are burnt to persistently maintain the ratio of 1:1 between physical gold/ETF and GOLD asset . The commission for FIAT — GOLD — FIAT transactions is 2% of gold market price for the whole circle.

Staying intact to transparency and accuracy, GoldMint unlatches the potential of world’s most valued asset through an effective trading platform. As the interest of the investor grows towards tokenized Gold, GoldMint’s Blockchain lets you utilize the commodity in different ways and up scales its exchangeability.

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