Digitex Futures to Convert to a Decentralized Autonomous Organization (DAO)
The DigiDAO token (DGDAO) will represent equity ownership of Digitex Ltd.
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06/17/2019, Providence, Seychelles – Digitex Ltd, a world-first commission-free non-custodial futures exchange with its own native DGTX token today announced plans to become a DAO (Decentralized Autonomous Organization). Starting October 1, 2019, ownership of the Digitex Futures exchange will be transferred to its community over a five-year period.
Check Out Adam’s Video Explainer About the DigiDAO
The Key Takeaways from the DAO News
Digitex Ltd, currently solely owned by founder and CEO Adam Todd, will convert itself from being privately held to be majority owned by its community of Betfair Traders. Adam will rescind 80% equity ownership of the company in order to decentralize the exchange’s ownership and introduce a system of decentralized governance by blockchain.
This will be made possible through the creation of 1,000,000,000 (one billion) new tokens, called the DigiDAO token (DGDAO), representing equity ownership of Digitex Ltd. 80% of the DGDAO tokens will be locked into a smart contract called the DigiDAO Smart Contract and released daily to DGTX token holders over the next five years.
Unlike an STO or an ICO, these tokens are not being sold but gifted freely to DGTX token holders. This will allow the DGTX token, which is compulsory for all transactions on the exchange, to transform into a pure utility token while the DGDAO represents equity ownership and voting rights.
CEO Adam Todd said in the above explainer video:
“We’re going to tokenize ownership of Digitex Ltd into one billion tokens that we’re going to call the DigiDAO token… One billion DGDAO tokens are going to represent equity ownership of Digitex Ltd with all the ownership and governance rights that go with equity ownership… None of these tokens are going to be sold. I’m not selling any of these tokens, I’m giving away 80% of the tokens to current DGTX token owners.”
To receive DGDAO tokens, Betfair Traders must keep their DGTX tokens within the Digitex Futures exchange. This will have several positive effects on the exchange such as encouraging Betfair Traders to buy and hold for the long-term and restricting the supply of DGTX, therefore, in theory, increasing its value. Adam explains:
“It’s not just Betfair Traders who want to use the Digitex Futures exchange that need to buy the DGTX token, there is going to be a whole new class of investors coming in that are interested in equity ownership and governance of what is going to be a monster of an exchange and the only way that they can get those tokens is to buy DGTX tokens and hold them. That is going to naturally restrict the supply.”
Digitex’s transition to this new form of governance and five-year plan demonstrates the company’s commitment to the longevity and liquidity of the exchange, as well as to its loyal community who currently stands at 65K on Telegram and over 1.5 million signed to the Digitex Futures waitlist.
The DigiDAO in More Detail
- Ownership of the Digitex Futures exchange is being transferred to the Digitex community over the next 5 years as it converts itself from a privately held company owned entirely by Adam Todd into a Decentralized Autonomous Organization (DAO) that is majority owned by its community of Betfair Traders.
- Adam Todd is rescinding 80% equity ownership of Digitex Ltd, a Seychelles company, to the Digitex community in order to decentralize ownership of the exchange and introduce a system of decentralized governance by blockchain.
- One billion new tokens called the DigiDAO token (DGDAO), that represent equity ownership of Digitex Ltd, a Seychelles company, will be created on 1st October 2019 and will be locked into a smart contract called the DigiDAO Smart Contract.
- 800 million DigiDAO (DGDAO) tokens (80% of total supply of DGDAO) will be released from the DigiDAO Smart Contract over a 5 year period on a daily release schedule and will be distributed proportionately and free of charge to DGTX token owners (and only those DGTX token holders) who hold their tokens on the Digitex Futures exchange. Each DGTX token held in the Digitex exchange will receive an equal share of the 438,356 DGDAO tokens distributed daily.
- 200 million DigiDAO (DGDAO) tokens will be released from the DigiDAO Smart Contract over a 12 month period on a daily release schedule and will be distributed to Adam Todd.
- DigiDAO (DGDAO) tokens are not being sold. DGDAO tokens representing 80% equity ownership of Digitex Ltd are being gifted over a 5 year period completely free of charge to DGTX owners.
- Starting on 1st October 2019, DGTX token owners who have deposited their DGTX tokens into the Digitex Futures exchange will receive 438,356 DGDAO tokens each day (160 million DGDAO tokens per year) for a period of 5 years until all 800 million DGDAO tokens have been released from the DGDAO Smart Contract.
- Starting on 1st October 2019, Adam Todd will receive 547,945 DGDAO tokens each day for a period of 12 months until he has received 200 million DGDAO tokens from the DigiDAO Smart Contract.
- To be eligible to receive DGDAO tokens, DGTX token owners must deposit their DGTX tokens on the Digitex Futures exchange.
- Only DGTX tokens that are deposited with the Digitex Futures exchange or DGTX tokens that are locked up in the team vesting smart contract will receive their proportional share of DGDAO tokens each day.
- DGDAO payments will be made once a day at midday UTC time from the DigiDAO Smart Contract into the corresponding accounts on the Digitex Futures exchange.
- People can withdraw their DGTX tokens and DGDAO tokens from the Digitex exchange at any time.
- DGTX tokens that are not stored on the Digitex Futures exchange or that are not in the team vesting smart contract are not eligible to receive free DGDAO tokens.
- The Digitex Futures exchange will provide a public facing interface that displays exactly how many DGTX tokens are being held in accounts on the exchange and in the team vesting smart contract and how many DGDAO tokens each eligible DGTX will receive.
- The market value of DGDAO tokens will be determined by Betfair Traders when they are listed on the Digitex Futures exchange spot market. There will likely be a close relationship between the price of DGTX tokens and the price of DGDAO tokens.
- An increasing DGTX price will increase the value of the DGDAO token because the exchange holds 180 million DGTX in its Treasury and market making/insurance fund. An increasing DGDAO price will increase the value of DGTX tokens because it increases the value being received by DGTX token holders.
- The Digitex Futures exchange spot market will have a DGDAO/ETH spot market and a DGDAO/DGTX spot market.
- Token issuance voting rights of the DGTX token will be transferred over to the DGDAO token, allowing the DGTX token to be a pure utility token whilst all governance and ownership rights are held by DGDAO tokens.
- DGTX tokens held in the exchange will now effectively be receiving a daily compensation for the next 5 years, in the form of equity ownership of the Digitex Futures exchange, giving investors greater reason to buy and hold DGTX for the long term.
- Demand for DGTX from investors who are attracted to this daily token distribution will compete with demand from Betfair Traders who must own DGTX to trade on the exchange’s futures and spot markets, creating increased competition for DGTX.
- Demand from investors will constrict the available supply of DGTX. People will likely withdraw DGTX from cryptocurrency exchanges and will deposit them into the Digitex Futures exchange in order to receive their proportional share of DGDAO tokens.
- For the first year of its existence, the Digitex DAO will effectively be controlled by Adam Todd because after one year he will hold 200 million DGDAO tokens and the public will own 160 million DGDAO tokens, meaning that he would have final say over any governance votes.
- After 2 years, the Digitex DAO will transition into actual decentralized governance because Adam will still only own 200 million DGDAO tokens but the public will own 320 million DGDAO tokens. Each following year Adam’s influence on the Digitex DAO will gradually diminish as the DigiDAO Smart Contract continues to release DGDAO tokens on a daily basis to DGTX holders on the Digitex Futures exchange.
- Account holders on the Digitex Futures exchange must complete KYC to withdraw their DGDAO tokens.
- U.S. citizens and residents cannot open an account on the Digitex Futures exchange and are therefore not eligible to receive DGDAO tokens.
Do you still have questions? Adam will be hosting a live AMA on Wednesday at 11 am EST. Get in touch via any of our social channels with your comments, thoughts, questions, and feedback and we’ll be sure to clear up any doubts. Thanks for listening and for your continued support, we’re extremely excited about this latest news and can’t wait for Digitex to become community owned.
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