D

igixsWhitepaper:TheGoldStandardinCryptoAssets(English

)
preparedby:
AnthonyC.Eufemio<ace@dgx.io>
KaiC.Chng<kcchng@dgx.io>
ShaunDjie<shaundjie@dgx.io>
January2016
Version1.03

Abstract
Digixprovidesausecaseforthetokenisationanddocumentationofphysicalassetsthroughits
ProofofAsset(PoA)
protocol.ThePoAprotocolutilisesEthereum1 andtheInterPlanetary
2
FilesSystem(IPFS) totrackanassetthroughitschainofcustody.Thisallowsfortheopenand
publicverificationofanassetsexistencewithoutacentraliseddatabase.Digixalsooffersan
APIallowingotherapplicationstobebuiltontopofourassettokenisationservice.

TechnicalOverview:

ProductLifeCycle

1
2

"
[English]WhitePaperethereum/wikiWikiGitHub
."2014.29Dec.2015
B
enet,Juan.(September112015)
"TheIPFSProjectHowitworks"
.IPFS

KeyProducts

1. ProofofAsset(PoA)AssetCards

PoAAssetCardsconsistofthebelowinformationpermanentlyuploadedontothe
decentraliseddatabase:

TimeStampofcardcreation
SKUofthegoldbar
BarSerialnumber
ChainofCustodydigitalsignatures(Vendor,Custodian,Auditor)
PurchaseReceipt
AuditDocumentation
DepositoryReceipt
Storagefeesdue

PoAAssetCardsarekeptinanEthereumWallet.

2. DigixTokens(DGX)

DgxTokensaremintedviaaMinterSmartContract.EachDGXtokenrepresents1gof
Goldanddivisibleto0.001g.ForeveryPoACardthatissenttotheMinterSmart
Contract,DGXtokenswillbeissuedinreturn.Forinstance,a100gPoACardsenttothe
MinterSmartContractreturns100DGXtokenstotheuser.

DigixTokensareheldinanEthereumWallet.

KeyProcesses

Thereare3modularprocessesthatDigixusestoprovideaproofofexistenceandfungibilityfor
anasset,1forredemptionofphysicalassets,and1thatencourages

appDevelopment.Those
processesconsistof:

1. ProofofAsset(PoA)Verification
processwhichrecordsandprovidesanaudittrailof
anassetonEthereumtocreatePoAAssetCards.Theassetcardsarecertifiedusing
sequentialdigitalsignaturesfromtheentitiesinthechainofcustody,namely,the
Vendor,Custodian
,
Auditor
,whicharefurthervalidatedwithproofofpurchaseand
depositoryreceiptsprovidedanduploadedontoIPFSforpermanentrecord(Figi).

Figurei:DigixAssetRegistrationProcess

ThePoAVerificationcontainsasubprocessforregularauditsasshownin(Figii).

Figureii:AuditProcess

2. MinterSmartContract
tocreatefungibleDGXtokens,thatacceptsorholdsPoAAsset
CardsinexchangeforDGXtokens(Figiii).

Figureiii:MintingDigixGoldAssetCardsintoDigixGoldTokens

3. RecasterSmartContract
,whichisusedtoexchangeDGXtokensbackintoPoAAsset
cards.(Figiv).

Figureiv:RecastingDigixGoldTokensintoDigixGoldAssetCards

4. RedemptionProcess
,forredeemingphysicalgoldbarwithPoAAssetcards.(FigV).

FigureV:DigixGoldRedemptionandTokenBasedUserIdentification

5. GenericI/OContracts,
allowingdeveloperstoutilizePoACardsorDGXtokensfor
appdevelopment.

EthereumSmartContractsStack

ThediagrambelowshowstheindividualDigixsmartcontractsdeployedontheEthereum
blockchainthatmakeupthecoreprocessesabove.

DigixsProofofAssetParticipants
(BlockchainOracleEntities)

AssetVendor

ValueMaxSingapore,apubliclylistedcompany,suppliesLondonBullionMarketAssociation
(LBMA3)certifiedgoldbullionbarsthroughtheDigixMarketplace.Establishedin1988,they
providepawnbrokingservices,retailandtradingofpreownedjewellery,goldandluxury
timepieces.

IndependentAuditor

BureauVeritasInspectoratewillcarryoutquarterlychecksonthequalityandquantityatour
custodianvaulttoensureaccountingisupheld.Theyareamultinationalgroupwithcapabilities
inanextensiverangeofcommodities,providingindependentinspection,samplingandtesting
servicesofpreciousmetals.

EverygoldbullionisrigorouslytestedwithprecisioninstrumentsatAudit.Weperformsuch
measurementsusingUltrasonicGaugeMeasurements(UTM)anddensometers.UTMisa
methodofperformingnondestructivemeasurement(gauging)ofthelocalthicknessofasolid
elementbasingonthetimetakenbytheultrasoundwavetoreturntothesurface.Densometers
aredevicesthatmeasurethedensityofobjectswithwaterdisplacement.

ParticipatingCustodianVault

MalcaAmitsstateoftheartfacilitynearSingaporeChangiInternationalAirportislocatedinthe
LeFreeportofSingapore,a25,000sqmhighsecurityandclimatecontrolledfacilityfeaturing
cuttingedgesecuritytechnologiesenhancedbygreenbuildingengineering.

MultipartyTrustMechanism

TheDigixsystemreliesonmultipleindependentparticipantstoprovideatransparentplatform
forthetokenizationofphysicalassets.WecanassumethatminersinaProofofWorkbased
cryptocurrencysystemwillactrationally,thatis,thattheywouldactinawaytomaximizeand
protecttheirlongtermprofitsbyperformingtheirroleoftransactionverification.Weassumethat
acartelofrationalminerswouldnotcolludetoperformdoublespendingattacksassuchattacks
wouldcausereputationaldamagetotheentiresystem.Wemustthereforeassumethatinthe
Digixsystemwhichisthetripartysystemconsistingofassetprovidingvendors,theasset
custodianinchargeofstoringandsecuringtheassetfromtheft,andtheauditorinchargeof
3

"LBMAFAQs"
.TheLondonBullionMarketAssociation.

ensuringtheauthenticityofthereportedassetsincustodyareallactinginarationalmanner
whoaretryingtomaximizetheirprofitsfromthefeesthattheycollectfortheirservice.

MitigatingPotentialPointsofFailurewithRealWorldGovernance

DishonestEntitiesandcollusioninthechainofcustody

Digixworkswithentitiesinjurisdictionsthatprovidestringentregulatoryoversightandcorporate
governance.Theentitieswehaveengagedwithareeitherpubliclylistedorwellknowninthe
industryforprovidingtheirnicheservice.Eachentitythatwehaveengagedwithperformsa
separatefunctiontopreventcheating.Forinstance,theassetvendorforphysicalassetscannot
alsobetheassetcustodian.Theinterestintheservicehastobeindependentofoneanother.
Whiletheriskofcollusionisarealpossibility,itisatthecostofseverereputationalandlegal
damagestothecolludingparticipants.Astheseentitiesprovidesimilarotherservicestoother
customersandsuchreputationalandlegaldamagestotheircorebusinesswouldbedetrimental
totheirbusiness,wecanmakeafairassumptionthattheywillactinarationalmanner.

KeyBenefits

NocentraliseddatabasemanagementofCryptoAssetrecords

AllchainofcustodyinformationisfullymanagedbytheEthereumblockchain.Thisblockchain
ledgerisimmutablewithdatauploadtakingsignificantlylesstimethanontheBitcoin
blockchain.4

NoWebbasedlogin

Thereisnowebformlogin.UserswilldownloaddesktopclientsfromDigix.Theapplication
5
itselfcanalsobecompiledfromsourceonGithubandispubliclyauditable.
Thereis
significantlylesschanceofaManintheMiddleattackcomparedtotraditionaluserwebbased
login.5

SecureColdStorageofCryptoAssets

DigixsAegisVaultsisacoldstoragewalletcustodialserviceforcryptoassetsandcrypto
currenciesonEthereum.

PerpetualExistenceofDigitalAssets

CryptoBond.(September16,2015)
WhyIsEthereumDifferenttoBitcoin.
CryptoCompare
Hjemlvik,Erik.
(March27,2011)NetworkSecurityBlog.
NetworkForensicAnalysisofSSLMITMAttacks"
.NETRESEC

Allassetdataisrecordedontheblockchainandexistsindefinitely.EvenifDigixfolds,every
proofgeneratedcanbeverifiedandareadmissibleinacourtoflawintheapplicable
jurisdiction.

ExpostfactoIncentivizationMechanism

TheProofofAssetprocessrequiresthatregularquarterlyormorefrequentauditstobe
performedbya3rdpartyauditorontheentirecollectionofgoldassetsheldatthecustodian
vaults.Theauditorperformsacompleteauditofeachgoldbarwhichincludesverificationofits
authenticity,weight,andphysicalexaminationtodetectanomaliesordefects.Theauditor
submitsarecordontheGoldRegistrycontractforeachandeverysinglebarthathasbeen
audited,whichcontainsanIPFSreferencetoasignedpaperdocumentation,theauditors
Ethereumidentity,andapassorfailresult.

DigixreceivesitsrevenuesthroughthecollectionoftransactionfeespaidintheformofDigix
goldtokens.Thesetokensareheldinanescrowcontractwhichcanonlyreleasethetokenstoa
specifiedaddressafterthesuccessfulcompletionofa3rdpartyaudit.

GenericI/OContractsandappDevelopmentOpportunities

ThegenericI/OcontractprovidedatDigixallowsdeveloperstoutilizePoAAssetCardsorDigix
tokensforappdevelopmentandeventlogging.Ourvisionistocreateanecosystemfor
developerstoutilizeDGXtokensasaframeworkforvariousappdevelopments.Code
sampleswillbeprovidedonourGithub.

WealthInheritance

Deadmansswitchcanbebuiltasaservicetoallowwealthtobepassedonintheformof
CryptoAssetstothementionedEthereumaddressundertheDigixsystem.

Gamification

Inlegaljurisdictions,DGXtokenscanbeusedlikebitcointofacilitateingamecurrencyoras
gamingtokens.6 ThePoAprotocolcanalsobeusedfortheissuanceofdigitalgamingassets.7

Escrow

DGXtokenscanprovideabetterandlessvolatilestoreofvalueforEscrowservicesonthe
blockchain.
6

Farivar,Cyrus(January22,2013).
"Bitcoinbasedcasinorakesinmorethan$500,000profitinsixmonths"
.ArsTechnica.

Addison,Ian.(December22,2015)
GamechangersFreeMyVunkandDigixallowvideogamers..."
IBTimes.

Crowdfunding

Aappcanprovidecrowdfundingopportunitieswithcryptocurrenciesandcryptoassets,or
offerconvertibilityofcryptocurrenciestoDGXtokensasahedgetopricevolatility.

GoldBackedCryptoCurrencyDevelopments

CryptocurrenciescanstakeaportionofitsvaluewithDGXGoldtokensandGoldAssets,
backingitsvaluewithGold.

CryptoExchangesandWealthManagementapps

WhenexchangesintegrateDGXtokensasacryptocurrencypair,theywillbeabletooffera
goldhedgetocryptocurrenciesaspartoftheirserviceoffering.Wealthmanagementservices
thatadjustsyourcryptocurrency/cryptoassetholdingscanbedevelopedtomanagean
individualscryptofinancialriskprofile.

P2PLendingandMicrofinance

appscanutilizeDGXGoldforpeertopeerlending.Aborrowercancallforfundingthrougha
appbasedonhisriskprofileandreputationandnegotiatearateofreturnontheborrowed
funds.Interest/yieldpaymentscanbeservicedatregularintervalswithapenaltysystemin
placeforlatepayments.Thishasalreadybeendonewithbitcoin8,butduetothepricevolatility
ofcryptocurrencies,lendersmaylosemoreoftheirassetvaluethanwhatcanbeearnedfrom
theinterestduringtheperiodoftheloan.ThepricestabilityofDGXGoldTokenscanfacilitate
theadoptionrateofsuchservices.

Collateralservices

Privatelyheldassetscanbesafelyandefficientlyusedascollateralwithoutgoingthrough
lengthyverificationprocesstoascertainanassetsexistenceandauthenticity.

Conclusion

Digixwillprovideatransparent,auditfriendly,safeprotocolthatleveragesthefullpotentialof
Ethereum'sdecentralizedconsensusecosystemandIPFStofacilitatecryptoassetsonthe
blockchain.

Shieber,Jonathan(June5,2014).
"BTCJamBringsItsBitcoinBasedLendingServiceToEmergingMarkets"
.TechCrunch.

Digix
preparedby:
AnthonyC.Eufemio<
ace@dgx.io
>
KaiC.Chng<
kcchng@dgx.io
>

ShaunDjie<
shaundjie@dgx.io
>
V1.02

Ethfans

DigixPoAPoA
9IPFS10 chainofcustody
DigixAPI

]ethereum/wikiWikiGitHub
.

"2014.29Dec.2015

10

enet,Juan.(September112015)

IPFS
"
.

IPFS

1PoA

PoA

SKU

PoA
2DigixDGX

DGXDGX10.001PoA
DGX100
PoA100DGX

Digix

3Digix11
Dapp

1.PoAPoA

IPFS

iDigix

PoAii

ii

2DGXPoADGX

iiiDigixDigix

3DGXPoAiv

ivDigixDigix

4PoAv

VDigix

5/I/OPoADGXDapp

Digix

Digix

ValueMaxDigixLBMA11
ValueMax1988

BureauVeritasInspectorate
DGX

UTM
UTM

MalcaAmit
25000

Digix
PoW

Digix

11

LBMA
"
.

Digix

12

DigixGithub
Digix13

Digix

Digix

12
13

CryptoBond.(September16,2015)
.

CryptoCompare
H
jemlvik,Erik.

March27,2011).
SSLMITM"
.

NETRESEC

IPFS

DigixDigix

/I/ODapp

DigixI/OPoADigixDapp
DGXDapp
Github

Digix

DGX14 PoA
157

DGX

DappDGX

Farivar,Cyrus(January22,2013).

"
Bitcoin

basedcasinorakesinmorethan$500,000profitinsixmonths"
.
Ars

Technica.
15

Addison,Ian.(December22,2015)

Game

changersFreeMyVunkandDigixallowvideogamers..."

I
BTimes.

14

DGX

Dapp

DGX
/

P2P

App
DGXP2PDapp
/
16
DGX

Digix
IPFS

Shieber,Jonathan(June5,2014).

"BTCJamBringsItsBitcoin
BasedLendingServiceToEmergingMarkets"
.
TechCrunch.
16