Digix announces return of 465,000 ETC to DGD holders

In an interesting development, Singapore-based Digix Global — the company that plans to bring physical gold-based tokens to the Ethereum blockchain — recently announced that it will return 465,000 ETC to DigixDao (DGD) coin holders. In an industry rife with scams, fraudulent ICOs, theft, and outright self-interest, this is definitely a pleasant surprise from a top blockchain development team.

Following a successful ICO in March 2016, which was used to create the Digix DAO, Digix raised over 465,000 ETH, worth $5,000,000 at the time. The funds were immediately locked into an Ethereum smart contract and have not been touched since. When Ethereum later hard forked in 2016, the Digix DAO ended up using 465,000 ETC to match the ETH held in that contract. Today, Digix DAO holds a whopping $45,000,000 in ETH and ETC.

Needless to say, Digix Dao is now flush with cash.

As the price of ETH raised in Digix's ICO continues to rise, the company plans to invest in projects and commodities (gold) that will help develop their strategy to tokenize physical assets. Digix insists that the funds do not belong to them, but to Digix Dao, individual holders of DGD tokens, who hope to soon become the first decentralized autonomous organization to exist on the Ethereum blockchain. DGD holders are the ones who decide how to spend the 465,000 ETH.

I recently asked Digix CEO KC Chng about this plan to return 465,000 ETC to DGD holders. KC Chng said:

“Well, the fact is that these ETC funds do not belong to Digix, they belong to the token holders, and we cannot use these ETC at will without the approval of the token holders. In addition, Digix development is carried out on the ETH main chain, so using DGD tokens cannot effectively manage these ETC.”

He went on to say,

“I think the main point people need to understand is that the funds raised by this ICO by DigixDao are not for the developers to use as they wish. These funds belong to the DGD coin holders and are used to create a real Dao.

Given that there are 2 million DGD coins outstanding, approximately 0.23 ETC will be returned for each DGD coin. The Digix team is currently working on implementing a smart contract to distribute these funds.