As widely discussed, Digix DAO is dissolving – following a community vote. With this, over 380,000 ETH held in the treasury funds will be distributed to DGD token holders, in a process beginning next month.
The funds represent the remainder of the total 450,000 ETH which were raised in Digix DAO’s 2016 ICO. The other 70,000 ETH has been used to fund projects within the Digix ecosystem. These included marketing efforts, community management, and exchange support, all centred around their flagship DGX token – a gold-backed stablecoin.
Here’s everything you should know about the dissolution, and what DGD token holders will have to do in the coming months to redeem their token for ETH from the treasury.
DigixDAO Dissolution Timeline
August 2019 – A member of the Digix DAO community submitted a proposal via the governance platform, for treasury funds to be returned to investors in exchange for their DGD tokens. The proposal, titled “A Proposal For A DGD To ETH Burn Function” was voted upon by the community. Although the quorum was met, the quota requirement of 50% was not reached and the proposal was not passed.
However, It was revealed that the Digix founding team had voted against the proposal with three of their four-team wallets. Without their vote, the proposal would have met the quota requirement.
November 2019 – Following feedback from the community, a second proposal was announced – this time by the Digix team themselves. Rather than a simple burn function, this was an outright dissolution mechanism, dubbed “Project Ragnarok”.
If the proposal did not pass, it was designed to be re-submitted every quarter.
This time the Digix team would not vote but would contribute their stake to the vote to assist in reaching quorum.
January 2020 – Voting for Project Ragnarok completed, and the proposal was passed. The outcome was unanimously in favor of the dissolution, with 96.7% voting yes.
At this stage, the dissolution process is locked in to proceed in the next DigixDAO quarter, which begins March 25th.
February 2020 – The smart contract, which will handle the distribution of treasury funds, was written and audited by Quantstamp.
What happens now?
The dissolution process is set to start on March 25th.
All tokenholders which have their DGD stored on exchanges are recommended to withdraw them, as it’s likely DGD will get delisted following the dissolution process.
All DGDs will be able to be unlockable by tokenholders at the end of Q1. The creation of new projects and voting on the DigixDAO governance platform will subsequently be disabled.
“To claim their ETH, DGD holders will need to submit two transactions on the Ethereum blockchain, to “suicide” their DGD tokens. This can be done in MyEtherWallet. A tutorial will be provided by Digix, closer to the date.”
What is DGD?
DGD is the governance token for decentralized and autonomous community of DigixDAO. DGD token holders were entitled to fees from the exchange of DGX, a gold-backed Digix token. DGD was also used to vote on matters relating to the use of treasury funds, and the direction of the platform.
Following the dissolution process, DGD tokens will have no utility or value, as the entire governance platform will no longer exist.