Steemit Crypto Academy Week 7// Stable Coins (DGX) // Homework submitted to@yohan2on

Good evening, sure you are good Prof. @yohan2on, I am blessing and am delighted to be a student of your class this week.

We have been talking on stablecoins and I must confess I thought the only stable coins we had in cryptocurrency was tether but now am really enlightened on stablecoins. Thanks to Steemit and your Prof. @yohan2on.

Permit me to insight you on the outcome of my research on Digix (DGX) stable coins.

What is DGX
For emphasis sake, we say a stable coin is that coin which is backed by a fiat stable currency, usually pegged on the ratio of 1:1. In simple terms, DGX is a stable coin like other stable coin but the interesting thing is that while other are backed by a fiat currency, DGX is backed with gold, Its value is tied with 1 gram of gold, I guess that's interesting to note and we agreed from previous lectures that any stable coin must be the same price as that supporting or backing it.

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Digix as an organization creates a world platform where everyone can have access to hold, trade or exchange 99.99% gold bars in quality. It's vaults can be located in Singapore and Canada respectively.

Kai C. Chng is the Digix Co-Founder who manages Digix Global, an organization in charge of storing gold in its vault. DGX is built on the Etherum blockchain and a secure platform.

Trading DGX token
Since it is a special kind of stable coin, lets see how it can be traded. DGX according to the Co-Founder, has an incorporated device that is able to track all gold bars given to exchanges, moreover the system also carry out scanning of these bar. The same system also store important information /documents such as receipt details which is linked to every token issued out to exchanges.

DGX tokens are available in exchanges for trading in the decentralized market, these exchanges store DGX tokens and the underlying gold bars with Digix, from this a small portion of the token erosion takes place against the gold storage. This help exchanges make profit from DGX trading.

Unused gold bars can be returned and DXG tokens redeemed against the physical gold bars stored in the vault. Redeeming of this tokens are done in person for security reasons, according to Digix global.

The Co-Founder stated that they have introduced what is called Demurrage Fee (This is the fee paid for gold in the vault), which is almost equivalent to the insurance coded in the smart contracts of each gold bar. source

Trading on DGX attract fees which are divided into three types namely:

1)Transaction fee every time DGX tokens are sent is 0.13%

2)Recast fee whenever DGX tokens are exchanged for the physical gold bars is 1%

3)Demurrage fee formerly 0.6% was waived indefinitely. Demurrage is the storage fee for the gold in the vaults.

Benefits of Trading DGX
1)Payments are instant
2)It can be redeemed to physical gold bar
3)it is regulated by the government
4)Allow lending of digix tokens
5)It can be traded on exchanges
6)It allows for peer to peer swaps thereby creating a decentralized economy.

Conclusion
DGX is the first gold backed decentralized stablecoin on the Etherum blockchain with the aim at meeting the high demand for tokenized digital assest within and outside the blockchain. It's advantages are quite enormous, it can be traded in over 10 exchanges, though might have some disadvantage arising from third party organizations.

Thank you

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