Digitex Futures is a project that most people have heard of by now. With a massive Telegram community and Twitter following, the company racked up a whopping 1.5 million signups for its launch waitlist. It then failed to launch and it’s larger-than-life CEO released a scathing video blaming the company’s developers. Digitex looked somewhat adrift as the community faith began to dwindle and the rumors and fears set in.
But now, just a few weeks later, it appears that the young company’s very public and scary nightmare is over. Teaming up with the Ethereum-approved SmartDec development team seems to have been a wise choice for Digitex. Slowly but surely the company is regaining the trust of its followers and clawing back credibility.
With the development of the exchange apparently back on track and in safe hands, Digitex is now aiming for more. This Monday, Adam Todd released yet another of his shocker videos, this time around a lot calmer and more collected than before. Clearly confident and composed, the Digtex CEO unveiled the company’s latest plans. Starting October 1, 2019, Digitex Futures is becoming a DAO.
Digitex Futures is Becoming a DAO
For those of you not quite sure what a DAO is, it’s a Decentralized Autonomous Organization. If that’s not immediately clear, it essentially means that there’s no hierarchy. Participants in the company (its community or employees) decide on issues concerning the organization by voting on them, through mechanisms coded into smart contracts.
Cryptocurrencies like Bitcoin and Ether remove the middleman from financial transactions. A DAO does the same thing when it comes to business governance.
Using smart contract technology can help a business to automate many tasks beyond financial transactions such as paying suppliers or employee salaries. Any process that requires decision-making can, in theory, be preprogrammed into a smart contract.
In short? A DAO is like a normal company with rules and procedures. It’s just that they are enforced digitally and not manually. There are very few working DAOs at the current moment and this is certainly an ambitious undertaking from Digitex.
However, for anyone concerned about security issues such as The DAO hack of 2016 (that split Ethereum in two), they needn’t worry, according to Todd.
In his video, he assured the community that not only has technology moved on light years since three years ago but that SmartDec’s entire business model is based on auditing smart contracts.
Actually, while this model may not be widely used yet, plenty of companies large and small are experimenting with it, including JPMorgan, for automating back-office tasks.
How Exactly Does the Digitex DAO Work?
From October 1, Digitex Ltd will begin the process of gradually transitioning into decentralized ownership over a period of five years. Digitex will create one billion DigiDAO (DGDAO) tokens and place 80 percent of them into a smart contract called the Digitex DAO Smart Contract.
These tokens represent equity ownership of the company. Adam Todd as CEO will be retaining a 20 percent stake. The DGDAO tokens represent voting and ownership rights and will be allocated to all DGTX holders in proportion to the amount that they hold.
Unlike an ICO or an STO, DGDAO tokens are not being sold but given away freely to Digitex traders and token holders. Through this, the company hopes to achieve several things. Firstly, its native DGTX token can become a pure utility token since it’s compulsory to buy in order to transact on the exchange. However, it will no longer hold any voting or ownership rights.
Second, the DGDAO tokens are being distributed daily over a period of five years to DGTX token holders who keep their DGTX with the exchange. This will ensure that the exchange maintains liquidity upon and after launch and incentivizes the community to buy and hold DGTX tokens for the long-term.
Furthermore, holding onto a token that is in demand to trade with and has a capped out supply, increases its scarcity. Restricting the supply of DGTX means that its value will likely increase.
This is certainly a cutting edge idea. It will be interesting to see how the community digests and reacts to this news over the coming days. While the sweeping majority just want to hear when the launch will be, others will likely see the value in the fact that Digitex is planning for the long term – and creating value for its token holders.