What Is DigixDao (DGD) and Why Is it Skyrocketing?
A lesser-known cryptocurrency, DigixDao (DGD), is swiftly ascending the market cap ranks. It has piqued immense buying activity in the past week and is now trading in the top 25. But what is DigixDao, and is it really worth investing in? Those are the questions we’ll be addressing below, along with presenting our DigixDao price prediction for 2018.
DigixDao is a cryptographic spin on the fiat gold standard. DigixDao is an Ethereum-based token that raised money through an initial coin offering (ICO) in 2016. According to its team of developers, the money was put to use creating a new cryptocurrency that is expected to be released this year.
This new crypto, named DigixGold (DGX), will be backed by physical gold. That’s right! DigixDao is creating new tokens, each of which will be backed by one gram of gold.
So why exactly are investors doling out money for DGD? Let me explain.
DGD vs. DGX: Investors Mustn’t Confuse the Two!
The existing cryptocurrency DigixDao will offer DGD token holders voting rights for DigixGold’s DGX tokens, in addition to a claim over quarterly rewards that will be generated through DGX transaction fees.
While no official release date has been provided for DigixGold, the developer team has confirmed that the DGX tokens will be available for sale during the first quarter of 2018. This is why new investors have been swiftly moving in to buy DGD ahead of the DGX release.
DigixDao’s developer team confirmed last week that the new crypto is now in the final phase of development and is slated for release by the end of Q1 (March 2018).
Unlike virtually all of the other 1,500 cryptos out there, DGX addresses the two biggest investor concerns about cryptocurrencies: one pertaining to their intrinsic value and the other to their price volatility.
DGX’s biggest selling point is that it is backed by gold. Skeptics have long questioned the worth of cryptocurrencies on the grounds that their market value is created out of thin air. DGX aims to be unique; it claims to replicate the value of gold, which is assumed to give the cryptocurrency an inherent value.
Second, since the price of DGX will be tied to gold, it is expected to offer much more price stability than most cryptos out there.
To give you an idea, take the example of cryptocurrency Tether. As its name implies, the price of this crypto is tethered to something of intrinsic value—in this case, the U.S. dollar. This is why Tether’s price has remained stable through market booms and busts.
But here comes the catch. While DigixGold may offer price stability, DigixDao cannot promise the same. Just take a look at its price chart below. DigixDao has seesawed over the past month, and has practically shot through the roof this week.
Chart courtesy of TradingView.com
As of this writing, the DigixDao price had surged more than 24% in the trailing 24 hours and one DGD token was costing buyers more than $560.00.
The DigixDao coin price has multiplied exponentially in anticipation of the release of a technology that’s currently nonexistent. While the DigixDao developer team has been offering timely updates on the DigixGold project’s progress, we remain skeptical until we see the final product.
Let’s now forget that the cryptocurrency market is unregulated and heavily crowded by pump-and-dump schemes. Most steep ascensions in this space are followed by free-falling prices.
Also, note that, while DGX may eventually turn out to be a promising crypto, we are unsure how DGD coin, currently priced at 13 times the price of one gram of gold, will be a viable investment in the long run. This is why we remain conservative in our DigixDao price prediction.