Decentralization to the Rescue – Digitex: Whitepaper Breakdown Pt.1 (DGTX)
Introduction
Digitex is a self-proclaimed commission-free, trustless futures exchange for trading digital currencies. It’s easy to claim that you have positive attributes, but here I am to go through the whitepaper and make sure that the information provided by the Digitex team is reasonable and valid. Spoiler alert – it is! You though shouldn’t be swayed by that information alone! Let me present to you the whitepaper breakdown of the Digitex futures exchange.
Digitex – What is it exactly?
The first sentence of the article may be self-explanatory, but probably hard to grasp. Let me break that down for you too then. Digitex will be a futures exchange - futures trading means that you are betting on the future value of the commodities. You make a contract that is bound to execute in the future for a predetermined price. There will be no fees charged for any activity done on the platform. The self-funding method will be explained a bit later. Digitex will use its native token DGTX for all purposes - all contracts will use DGTX as a currency and potential profits and loses will also be calculated in DGTX.
Digitex will use a semi-decentralized and semi-centralized infrastructure, utilizing the best from both the models. Decentralized exchanges as of yet haven’t solved all the UX (user experience) problems. Then again centralized exchanges are anything but sympathetic due to the fact that we have to yield our keys (therefore the commodities) to a third-party. No one with all the senses intact likes to do that right? Semi-(de)centralized models are therefore as of yet the most sympathetic ones. Now that we know what exactly will be reviewed, let’s get bit more detailed!
DGTX
DGTX plays an absolutely crucial role for the platform to function properly as intended. Many decentralized projects fail to find a significant role for their underlying token and the fact that Digitex has managed to do so is incredibly important.
The most important aspect of the platform is that it will charge no fees on the executed trades. How is that possible? When I reviewed Cobinhood not a long time ago I had to say that there are incredibly high withdrawal fees to make up for the no-fee policy. But everything is free on the Digitex platform. But… NOTHING is for free right? So how is that possible?
It will be possible due to a revolutionary governance model which frankly is nowhere close to being finished, nevertheless the concept could have a bright future. The principle is rather easy. Stake holders will be able to vote and reach consensus on how many tokens should be issued and how often. Those issued tokens will solely be used to pay for the operating costs of the platform – meaning servers, marketing, etc. – simply everything).
The economic model is therefore following. Users can not use the platform without holding DGTX for all the actions on the platform are either done in DGTX or require the user to hold some. This will be driving the demand for the token. Users do NOT lose any tokens by trading (due to fees). The profit or loss is then realized when user decides to leave the platform or when he decides to sell portion of DGTX, but the stake remains complete.
The first token issuance will happen in two years after the platform has been launched. That will of course cause an inflation, but there are some variables that should be taken into account. If the demand truly will be high, the price will go up. If the value of the token will be high, there will be need for much less tokens to be issued in order to cover the costs. So if the demand will be high the inflation will actually be very low. On the other hand if the demand will be low and the value of the token will remain low and there will be more significant inflation (because more tokens will need to be issued in order to for the costs to be covered), but it actually won’t have a significant impact on the value of the token, since it already was low. Such a model is neat in my honest opinion! In any case it is totally worth a try. In the worst case scenario, other platforms could implement an upgraded versions of such a model.
The whitepaper though in all honesty lacks very important information about this model. One has to imagine quite a lot of variables and that is anything but desired if the project wants to be taken seriously. The governance model truly got my attention, but frankly, the whitepaper didn’t provide any valid information about it. How will the consensus be decided? How many votes need to be casted? Will it be 51% consensus? 60%? 80%? Will there be any time limit? If not how is the platform going to operate before the community reaches consensus? There is an infinite amount of questions to be asked really, because the only additional information about the model provided in the whitepaper is 1 DGTX= 1 vote – which actually relays no relevant information whatsoever. This needs to be improved Digitex team!
Let me also present some DGTX’s attributes in the most digestible way:
Initial supply 1,000,000,000 tokens (1 billion)
Consensus on the issuance
No issuance of DGTX for 2 years from the launch of the platform
65% reserved for public sale
20% reserved for market makers (will be explained in next article)
10% reserved for Digitex team (vested for 3 years)
5% reserved for referrals
Possible pegging through a peg system (will be explained in next article)
Stake can be delegated for voting purposes
To be continued…
Potential Sources
- Project Website: https://digitexfutures.com/
- Products & Services:
https://digitexfutures.com/exchange/
https://digitexfutures.com/dgtx/ - Digitex Team: https://digitexfutures.com/about-us/
- Digitex Story:
DISCLAIMER
The information contained within this post shall not be taken as a financial advice. I am not a financial advisor and none of your investment decisions should be carried out based on any information presented here. You can lose all of your money by investing. The information presented in this article is for educational and entertainment purposes only.
Hi @fingersik!
Your post was upvoted by @steem-ua, new Steem dApp, using UserAuthority for algorithmic post curation!
Your UA account score is currently 4.683 which ranks you at #1542 across all Steem accounts.
Your rank has dropped 2 places in the last three days (old rank 1540).
In our last Algorithmic Curation Round, consisting of 425 contributions, your post is ranked at #354.
Evaluation of your UA score:
Feel free to join our @steem-ua Discord server