Dev Update — Dec 4 2017 Notes on VC Funding, Japan Roadshow, Audit Review, DigixDAO
Business Developments
Japan
This week, some of us are in Japan to demo our product at the Global Brain Alliance Forum. We will also be speaking at a local meetup group to share more about what we are building at Digix.
If you happen to be in Tokyo, come by say hi and RSVP here
Panel discussion at Blockshow Asia last week:
Blockshow Asia, organized by Cointelegraph, saw almost 1500+ attendees and topics ranging from token economy, crypto funds, ICO investing covered by a wide range of speakers. Shaun spoke on Day 2 of the conference on a panel titled“Blockchain & The Token Economy” alongisde speakers such as Toby Hoenisch from TenX and Brock Pierce from Blockchain Capital.
A note on VC funding
Many Digix supporters are confused as to what the funding round represents.
GlobalBrain Corp and Fenbushi Capital are some of the strongest Venture Capitals in the Asia region.
Their expertise in management and scaling will be a tremendous boon for Digix. Their involvement in Digix gives us great opportunities to showcase our product to their traditional and blockchain portfolio of companies looking for a stablecoin, as well as the strength of our technological stack.
Has this anything to do with DigixDAO?
We published a blog post detailing the separation of functions at Digix a year ago. https://medium.com/@Digix/difference-between-digixglobal-and-digixdao-26eac952c04f
Private stakeholder interest in Digix (the private company) lies outside of any objectives to ‘take control’ or change the vision of DigixDAO.
A point to clarify is this: The private company does not have control over DigixDAO once the governance model is in place, as the control of DigixDAO ETH will be fully given to DGD holders.
Digix the private company are creators of 2 crypto tokens: DGX and DGDs, which can only be achieved with our proprietary Proof of Asset Protocol to produce auditable and transparent blockchain gold tokens.
What is the Proof of Asset Protocol?
The proprietary Proof of Asset Protocol is a fully decentralized, on the public blockchain provenance solution for physical assets. To date, we do not know of any company that can readily attest to a fully public blockchain provenance of physical assets before releasing their crypto tokens on the blockchain. Many would still rely on alterable database records to issue tokens with dubious audit statements, which will likely lead to accountability issues and discrepancies when scaling. We are already seeing this unfold with fiat based tokens that mirrors fiat currencies and in certain asset backed tokens, and we will not like to see this for DGX tokens as it puts our business in a vulnerable and untrustworthy position in return for short term scaling gains.
The VCs’ investment into the private company is therefore a vote of confidence in our protocol and approach on the blockchain as these two renowned VCs make investments only after rigorous due diligence. We also feel that their credibility helps Digix increase its reputation in the blockchain industry and beyond as it is also a stamp of approval that our on chain provenance protocol is well thought out and a significant game changer for many industries.
Hybrid Model in blockchain startups
To date, we are not the only blockchain token company to have taken this hybrid approach in building a company. There are several blockchain companies that adopted a hybrid approach to funding, where the private companies received VC funding while also launching a token sale, such as TenX Pay Tokens, OMiseGo tokens, among others.
These companies do have business arms that are not public facing; with respect to Digix, it is the Proof of Asset protocol we have developed which can be applied to a myriad of use cases, such as supply chain management, trade finance, document management which brings value to the private company.
Therefore, the role of VCs is in part to help showcase our protocols to potential corporates. This is unrelated to the DigixDAO and its vision to grow the DGX ecosystem. In return, VCs can also help showcase DGX to their network of partners who may find great use cases for the tokens and further increase the adoption of these tokens.
The new stakeholders of Digix the private company are fully behind in working with the core team to scale DGX and DGD according to the original vision Digix had in mind.
In short: DigixDAO’s vision remains the same with or without private funding. That is, to build a decentralized governance model to spur the growth of the DGX ecosystem.
How would we see DigixDAO function in the near future?
The original idea remains: if, for example, you had a project, such as a music video you wish to produce to show the world how useful and awesome DGX is, you can submit a proposal to DigixDAO and get DGD holders’ approval. This could be anyone, even digix the private company itself. As a reward for taking part in the governance, DGD holders are rewarded with DGX.
Can we have more details on how this works?
The details on how this is done will be worked out progressively. We have to bear in mind game theory mechanics to create a fair governance system for DGD holders. Not to forget we would also have to work alongside Singapore regulators to see what is and is not allowed before any ETH is disbursed.
Governance questions: Too much to stake? Too little? Too high? Too low? Too fast? Too slow?
Dash Coin and its governance, for example, requires 5 dash as proposal fees from any users prior to the submission of proposals for decentralized governance and voting by masternodes (holders of 1000 dash tokens). The questions we can learn from the models out there are:
- How much is too much as a fee for DigixDAO that prevents good proposal submissions, and how little is too little to prevent spam proposals from flooding DGD token holders for voting?
- Should the fees be submitted as DGX or ETH or DGD?
- What should be the minimum quorum size be for each proposal?
- What should be the min or maximum amount requested per proposal?
- Should there be fixed milestones for targets achieved?
- How long should each proposal remain open for voting?
These are questions that we have been thinking about concurrently, and will be detailing them in the upcoming weeks. We look forward to embarking on phase 2 of our journey (building DigixDAO governance model) as we are finally satisfied with the work we have done so far on DGX 2.0 smart contracts.
Audit Developments:
Auditors have now began looking through and auditing our core libraries and then proceed with auditing the implementation of the DGX 2.0 smart contracts directly dependent on them. We have been given an estimated 30 to 60 calendar days for this process. We will make an announcement of who they are once we get their go ahead, thank you.
