If you missed last month’s official AMA with our CEO Adam Todd, don’t worry. Here, we’ll remind you what the Digitex Treasury is, explain how it will help our exchange, and when it will start. Here goes.
What Is the Digitex Treasury All About?
The Digitex Treasury allows us to apply effective ways of using our DGTX token supply and provide transparent actions to the community. With the public exchange launching early Q2, the first token sale on 1st March will allow early investors to buy in at a low price.
Once the exchange goes live, the price is set to increase dramatically. We already have about a million users signed up to our waitlist.
If only 5% of those users were active traders, we’d still have 50K active traders, which is a busy exchange and we expect a significant spike in DGTX value!
This will bring treasury investors a favorable ROI in a very short amount of time.
Digitex Treasury Explained
Even though we’re offering free trading to DGTX token holders, the back end of such a complex operation is not free at all. And we don’t want to have to rely on large investors to meet our goal of becoming a top exchange.
We want a transparent and clear path forward that could potentially delay the minting of tokens and help us realize our ambitious expansion plans.
Treasuries are not a new thing within the crypto space. Most cryptocurrency companies have treasuries of their own token which they usually sell secretly, often to whales and without the knowledge of the market.
The key difference with the Digitex Treasury is that we’ve physically locked up our complete amount for two and a half years. We’ve also published exactly when and how those tokens will be released and sold.
This gives the market complete transparency about what tokens we’re selling and when–nothing goes on behind closed doors.
Many well-known blockchain projects, such as Polymath, use their own treasury. In fact, their platform has locked away 7.5% of its total supply of tokens for five years.
Raising Funds without Minting New Tokens
Out of the initial 1 billion supply of DGTX, we have set aside 10% for the Digitex Treasury (100 million). This means that we won’t have to mint any new tokens for the sale and there won’t be any negative impact on token price resulting from inflation.
The life of the Treasury is two and a half years and we consider it the second phase of our revenue model–much like any regular startup acquiring funding in seed rounds.
The main purpose of our Treasury is to fund our operations without minting new tokens and still be able to offer a zero-fee model.
The tokens in the treasury will be sold to the public via an Ethereum-based smart contract directly from us. Starting on 1st March 2019, there will be an ongoing token sale of 10 million tokens every three months lasting for 2.5 years. That makes it 10 public quarterly sales until June 2021.
The tokens will be automatically released for sale and can be purchased in ETH. They will be sold at a premium because we don’t want to negatively affect the exchanges currently trading DGTX or allow any traders to dump and make a profit.
There’s also a $50,000 cap on the number of tokens that can be bought per individual during open sale periods. This will deter whales from coming in and buying everything up in one swoop. Digitex wants to make it a fair playing field in the best interest of its traders.
KYC will be implemented for those looking to buy tokens directly from Digitex and unfortunately, at this time, U.S. residents will not be able to participate. Sorry folks, the regulators just aren’t ready for us yet.
More to the upside, there will be no exchange fee. And the price you see is the price you get — so no slippage either. Transactions will happen in real time as soon as the ETH funds are confirmed.
What About the DGTX Price?
As stated earlier, Digitex is not minting any new tokens. So, the DGTX token will not be affected by inflation for now because the stock to flow ratio is still the same. But when it comes to the price as seen in the market that is really another story.
Each round of token sales could yield a different result based on market sentiment and how many other factors are influencing the market price.
We came up with some possible price scenarios of $0.25, $0.50, and $1.00. If you want to know more about how much funds we could potentially make, read the initial treasury announcement. And remember this is over a 2.5-year period.
The Key Takeaways
Here are the key points to take away about the Digitex Treasury:
- The first round of DGTX offered to the public will start on 1st March 2019.
- There will be a total of 10 rounds with 10 million tokens for sale each round.
- The direct buying of tokens will be every three months.
- This is NOT a minting of new tokens.
- Tokens will be sold at a premium of the market price. The price for tokens sold directly by Digitex Future will not be priced below $0.05 regardless of what market price is.
- Traders buying through the exchange will have to undergo KYC.
- Traders who don’t want to jump through hoops and create accounts with exchanges can also invest larger sums of money easier with 100% security.
- There is a limit of $50,000 per person per round.
- This new funding model will allow Digitex Futures to be less dependent on big investors to fund operational costs to take advantage of opportunities to expand the company.
- This will help to provide funds for the futures exchange while providing transparency to the Digitex community and show that we are serious about competing with well-known exchanges like BitMEX and Binance.
Adding the Digitex Treasury is a feasible course of action to maintain the momentum in following our roadmap. This will allow Digitex to better deal with the expected–and unexpected–costs of operating and expanding in the crypto and futures market.
This helps to attain more independence from whale investor funding and strengthen the bond between the Digitex community. After all, what is an exchange without the people who actively use it?