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Digix Global, the decentralised gold tokenisation platform on Ethereum, has announced plans for the DigixDAO crowdsale to allow participants to influence the company's software development features going forward.
The concept of decentralised or democratic autonomous organisations (DAOs) was once considered a rather grandiose one, which might allow futuristic companies to float in a regulatory lacuna, for example.
But Ethereum has made them a reality and Digix demonstrates a very focused way in which DigixDAO token holders can pledge their support for proposals they would like to see developed by the company's engineers. The pledges will be tallied and the most popular requests worked on. In return for their efforts, token holders are rewarded with transaction fees of Digix Gold tokens on the Ethereum platform.
Kai Cheng Chng, co-founder and CEO of DigixGlobal, told IBTimes UK: "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. We will tally the votes and once the votes are met the funds that we raised during the crowdsale will be released for that specific project.
He said it gives everyone a direct incentive to participate and see where the funds are going and as a reward for doing so they get to earn transactions fees. He added: "You know how like when you send ether on the Ethereum blockchain you are required to pay some transaction fees in terms of gas, so the miners will receive the gas. So in the case of Digix tokens whenever you send Digix tokens, the DAO itself will collect transaction fees, in terms of Digix tokens and that could be dispersed back to the token holders."
Kai pointed out the DigixDAO, which exists entirely on the Ethereum blockchain, has no balance sheet impact on Digix core. He said: "This is why we could run this crowdsale, because if we involved our legal entity then that would touch our legal entity's profit and loss, which means we couldn't have done it as quick as we want it to. We would have to work to regulatory approvals for that."
Digital gold systems
Digix Gold tokens are gold backed Ethereum tokens on the blockchain that can be used by anyone to create lending platforms, payments processing, funding, or as collateral by virtual nations.
On the subject of virtual nations, Kai added: "New Dapps [decentralised applications] are coming up that involve trying to round up citizens from all across the globe, forming their own enclave, forming their own organisations.
"It would be great if they could back up some hard assets with gold tokens. This is something that being on an open platform like Ethereum could help propagate. The thing with all digital gold systems, they are all being made in a privatised, centralised manner; their APIs feed directly back into the service of the digital gold company.
"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. It just opens up a wide array of things that you could do with the gold tokens without our control, so to speak."
Digix is planning to get out the crowdsale by the end of March. Kai said: "We want to hit a minimum threshold for it to be meaningful. Our loose target right now is to raise at least $500,000. If we don't hit that amount we would return any virtual currencies that are sent to us."