Company Update — 10 Jun 2016
This blog post is a comprehensive update on the state of DigixGlobal and DigixDAO.
Redesign of our Corporate Image and Branding — Done
Chris, Digix’s front end engineer, found time amidst the hectic three weeks to re-skin and redesign our website. He has consolidated every available resource and information regarding DigixGlobal and DigixDAO into a navigation friendly webpage. We would also like to thank the community for joining DigixGlobal’s design competition last month to help reskin our site into its current look and feel. If you haven’t already seen it, please visit our site.
Relaunch Plans / Community feedback for Digix’s Client 2.0, DGX 2.0
The next significant task that we are working on is the relaunch of Digix’s client 2.0 and DGX 2.0.
The demo for this can already be seen here. The theming of the demo will change to go with our current site, and users can now have a general idea how the workflow of the new application will be like.
We will also be instituting front end KYC / AML procedures for any bar / token purchases moving forward. This is also to prepare for fiat payment integration for gold purchases through our platform.
We expect a completed 2.0 to be out within the next 3 to 5 weeks. We will update the community if there are any untoward delays.
MAS’s Regulatory Sandbox Announcement and its impact on DigixGlobal
Just 2 days ago, the Monetary Association of Singapore (MAS) has announced their framework for the FinTech regulatory sandbox. Since DigixGlobal is incorporated in Singapore and we have to follow local laws, DigixGlobal will apply into the sandbox to ensure its long term sustainability and viability. Upon submission of our application, it could take up to 21 days before a decision is made by the MAS on whether to include DigixGlobal into the scope of their regulation.
If the MAS views that there is a need to regulate DigixGlobal’s business activity, then the company would have to be placed within a sandbox environment for a period of time (likely not more than 6 months).
This could entail limiting the number of customers / capping the volume of gold sales per client on our marketplace until we move out of the sandbox. This could also mean submitting test proposals and pledges for DigixDAO for the duration of time.
Conversely, if the MAS views that we do not qualify for the sandbox environment, we would then have a little more flexibility in keeping to our own timelines for the project. We will update this in the next 3 to 4 weeks once the result of our application becomes known.
Setting up a Trust for DigixDAO
For DigixDAO, DigixGlobal is advocating and pushing for legal recognition for this entity. This, in our opinion, would facilitate real world contracts and agreements between DigixDAO and any future entities it works with. We are actively discussing with various lawyers both in Singapore and HongKong on how to move forward. There is simply no precedence for such a novel organization. Once we achieve more clarity on how this can be done, we will update the community.
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As you can see, several key factors are still undergoing discussion, and some can only move forward when we get clarity from regulators and external parties. Nevertheless, please be assured that DigixGlobal is moving forward with prudence and fervour, and we know that as long as we keep abreast of all developments and move in tune with the changing landscape, we will be best positioned to navigate this new environment properly and build a sustainable company.
DigixDAO Governance Contracts
We spent some time last week with Vitalik, Rune (MakerDAO) discussing about DigixDAO’s governance model. We want to also put it out there that The DAO’s push for a decentralized governance is respectable and commendable and we are actively monitoring and drawing lessons from it. Many issues surrounding DAOs in general is the disincentive / apathy for pledging / voting due to a free rider problem; A token holder may choose to ‘go with the flow’ and expect others to make optimal decisions on their behalf. If everyone begins to think like this, a DAO could be prone to attacks or zero progress.
There were some ideas thrown around with VB, Rune, and us when we met last week that we felt worth sharing:
- Window Extension to occur if last minute pledging surges
If there is a surge in the number of pledgers only at the closing window of the pledging period, the window automatically extends for another week. This discourages last minute action since it prolongs the resolution on said proposal.
2. Crowd Based Veto
Pledging / voting should only really be done if there is a significant controversy regarding said proposal. We had a chat with Rune and this is essentially how MakerDAO governance is currently being structured, albeit being off chain. Regular meetings are held within their community occurring off chain where they hash out ideas and make sure everyone is on the same page before pushing forward with a proposal. There is currently no involvement of the blockchain for this, but it works. An evolution of this idea is that only major disagreements should be put up for on chain pledging to limit the need to make decisions frequently.
3. No Pledging? No Rewards.
One idea thrown around is to allow claiming of rewards only if token holders participated in the pledging process. If a token holder does not act, then they will not be eligible to claim their rewards. This is an offshoot of Augur’s reputation model, where if a REP token holder does not decided on outcomes, they will start to lose REP. If they do decide on outcomes, they can earn more REP.
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On Chain governance is therefore not simple. People attend universities to learn about government and governance structures, now Blockchain DAOs have the complication of taking those lessons and weaving them into a set of immutable code. Our opinion is that DigixDAO’s governance should start with low level decisions, with some form of centralization, prior to evolving into a more complicated structure.
Just to make it known, DigixDAO’s governance model have several differences from The DAO, as listed below:
- No need to white list addresses, as DigixGlobal is the default ‘curator’.
- No 51% attack can be pulled, because of the point above.
- No disincentive to not pledge because of a split function, because there is no function to split in DigixDAO, but only dissolution of DigixDAO
This puts us in a more controlled environment to come up with a more simplified governance model that can be more effective.
We have an idea to start off with very simple proposals that do not require the disbursements of ETH. It could be qualitative questions or decisions ie: “Should we include silver bullion into our marketplace?” to test the efficacy of our governance system.
We hope to see to this after we finish our DGX client 2.0’s relaunch.
In the meantime, all rewards from transaction fees collected will remain with DigixDAO indefinitely, and will be up for claiming once our governance contracts are ready.
Thank you for your time and lets build this company together.
