Gold-backed stablecoin issuer Digix has integrated a dissolution mechanism into its DigixDAO platform, created to fund projects which encourage the growth of the Digix ecosystem. Each quarter, DGD token holders will vote on the mechanism — called Project Ragnarok — with DigixDAO only continuing into the next quarter if the dissolution vote fails.
The first Project Ragnarok proposal was recently submitted to the DigixDAO for voting, although the concept was first announced in a blog post on Nov. 29.
Why introduce a dissolution mechanism?
Digix makes clear that its position is firmly opposed to dissolution, as it believes that the Digix Gold (DGX) ecosystem would not have grown as it has without the support of DigixDAO community members. Due to this bias, it will abstain from voting on any dissolution projects.
However, feedback received from those who have participated in DigixDAO has been mixed. One recurring request has been for a mechanism so that DGD token holders can make a clean break from DigixDAO.
After considering a number of options, including a burn contract whereby DGD could be swapped for a proportion of the Ether held in the DigixDAO, Digix decided on a quarterly vote on dissolution.
And if dissolution vote passes?
If the dissolution vote passes, all of the remaining ETH in the DigixDAO fund, after other quarterly passed projects have been funded, will be returned to DGD holders. The DigixDAO will then not continue into the next quarter.
Digix and DGX tokens will continue to exist, but the platform for funding projects around the Digix ecosystem, will not.
Digix is one of a number of gold-backed stablecoin issuers, being one of the first to market, with a beta platform launched in January 2016.