Partnership Announcement: MakerDAO and Digix: DGX gold tokens to play a crucial role in the DAI stablecoin

Cryptocurrency and blockchain technology has long been seen as the next big technological breakthrough, but in the almost 10 years since Bitcoin’s creation the promise of p2p digital cash has been held back by one big drawback: the high market volatility of cryptocurrencies.

Dai and DGX are the leading solution to this problem, with both taking a different but complementary approach. Dai uses a fully decentralized system of smart contracts to create a decentralized stablecoin that is pegged to 1 USD and backed by diversified collateral on-chain, making it resistant to market crashes. Every DGX is an Ethereum token that leverages the regulatory stability of Singapore to provide a token backed by 1 gram of gold that can be redeemed for physical gold on demand.

This is where the synergy of Maker and Digix become apparent. Since DGX is a gold backed token, it is an ideal source of collateral for the Dai collateral portfolio. It is both a highly liquid and trusted asset, and it is available as an ERC20 token on Ethereum without being correlated to the cryptocurrency market.

Because the diversification value of DGX is high when compared to most of the assets in the cryptocurrency space, the Maker team plans to launch Multi Collateral Dai with a 3 billion debt ceiling for DGX. This high debt ceiling for gold will enable Maker to more safely include ETH and crypto-correlated ERC20 tokens like REP and OMG with high debt ceilings as well. It also means that Maker will be a driver of billions of dollars of DGX demand.

Digix also plans to expand the suite of products it has available to its users, and that Maker can use as Dai collateral. The next step will be silver tokens that, like DGX, are each backed by 1 gram of silver. The Maker and Digix teams will work together to make these tokens available on the Ethereum blockchain and as Dai collateral.

Again, emphasis on: "without being correlated to the cryptocurrency market". This decoupling will inevitably speed up the flippening (and praise Allah for that!)