Digix what? DigixDAO!
Many have called Bitcoin ‘Digital Gold’ but what about a cryptocurrency backed by real gold? Better yet, what about a cryptocurrency that supports a system for digital gold trading? That cryptocurrency exists and it’s called DigixDAO.
At the open on the 1st of January 2017 one DigixDAO token could be had for an average price of $8.54USD.
By the close of the 13th of March 2018 that same token could be sold for an average price of $340.78 USD.
That's a positive gain of a staggering 3,890%!
As a result, DigixDAO one coin that is firmly on our radar.
Stable Coin Cryptocurrency
With the cryptocurrency markets being so volatile, there is increased demand for so-called "stable coins".
A stable coin is a cryptocurrency that is pegged to another stable asset, like gold, and therefore has lower volatility.
Consequently, these coins are already seeing an increase in popularity.
The current industry leader, Tether, is being estimated to be worth over $2B USD.
However, the race for the next-gen stable coin is already on as Tether faces increasing scrutiny.
"Firstly, many have raised concerns that tether is being issued by the people who own the Bitfinex exchange. Critics argue that there should not be such a close relationship. But the issues run deeper than that. Fears have been raised that Tether Limited doesn't actually hold enough U.S. dollars to back all the digital coins in circulation. These rumors have been circulating for a few months." (CNBC)
Services like TrueCoin have been launched to provide a similar but more trusted USD-pegged service.
While others like MakerDAO (MKR) are trying to get around the problem entirely by creating stable tokens that are based on the performance of the cryptocurrency market itself.
In addition, market interest in Maker has been strong with a price increase from around $24USD in late January 2017 to around $737USD at the time of writing. That's a gain of around 2,970%.
The main criticism of Maker’s proposed system is the fact that for a market-based stablecoin to function there must be market stability.
This a tall order in the cryptocurrency markets to say the least.
What is DigixDAO?
DigixDAO is the governance token supporting the proposed Digix gold trading network.
Each separate Digix Token (DGX) is backed by real audited reserves of certified gold at a ratio of 1 gram to 1 token.
For a very long time bearish investors have sought out gold as a safe haven from other markets like stocks.
The Digix system has the potential to bring all those attributes to the cryptocurrency markets.
As a governance token DigixDAO presents a golden opportunity to purchasers. This is because it gives an opportunity for the holder to profit from the increase in value of the token itself.
It also provides token holders with voting rights over organizational decisions. In addition it provides commission from all future transactions of Digix tokens on the network.
MakerDAO and DigixDAO have already partnered to work together to make this goal a reality.
The volatility of the cryptocurrency markets shows no sign of letting up. As a result asset-backed cryptocurrencies may very well be the future.
For more information on how to buy DigixDAO and ongoing updates about the cryptocurrency markets head to our Learning Centre.