DigixDAO Whitepaper

Monday, May 7, 2018
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D​igix’s Whitepaper: The Gold Standard in Crypto­Assets (English / ​中文​) prepared by: Anthony C. Eufemio <[email protected]> Kai C. Chng <[email protected]> Shaun Djie <[email protected]> January 2016 Version 1.03 Abstract Digix provides a use case for the tokenisation and documentation of physical assets through its Proof of Asset (PoA)​ protocol. The PoA protocol utilises Ethereum1 and the InterPlanetary Files System (IPFS)2 to track an asset through its chain of custody. This allows for the open and public verification of an asset’s existence without a centralised database. Digix also offers an API allowing other applications to be built on top of our asset tokenisation service. Technical Overview: Product Life Cycle 1 ​"​[English] White Paper ∙ ethereum/wiki Wiki ∙ GitHub​." 2014. 29 Dec. 2015 2 ​Benet, Juan. (September 11 2015) ​"The IPFS Project ­ How it works"​. IPFS

Key Products 1. Proof of Asset (PoA) Asset Cards PoA Asset Cards consist of the below information permanently uploaded onto the decentralised database: ­ Time Stamp of card creation ­ SKU of the gold bar ­ Bar Serial number ­ Chain of Custody digital signatures (Vendor, Custodian, Auditor) ­ Purchase Receipt ­ Audit Documentation ­ Depository Receipt ­ Storage fees due PoA Asset Cards are kept in an Ethereum Wallet. 2. Digix Tokens (DGX) Dgx Tokens are minted via a Minter Smart Contract. Each DGX token represents 1g of Gold and divisible to 0.001g. For every PoA Card that is sent to the Minter Smart Contract, DGX tokens will be issued in return. For instance, a 100g PoA Card sent to the Minter Smart Contract returns 100 DGX tokens to the user. Digix Tokens are held in an Ethereum Wallet. Key Processes There are 3 modular processes that Digix uses to provide a proof of existence and fungibility for ​ ​app Development. Those an asset, 1 for redemption of physical assets, and 1 that encourages Ð processes consist of: 1. Proof of Asset (PoA) Verification ​process which records and provides an audit trail of an asset on Ethereum to create PoA Asset Cards. The asset cards are certified using sequential digital signatures from the entities in the chain of custody, namely, the Vendor, Custodian​,​ Auditor​, which are further validated with proof of purchase and depository receipts provided and uploaded onto IPFS for permanent record (Fig i).

Figure i: Digix Asset Registration Process

The PoA Verification contains a sub process for regular audits as shown in (Fig ii). Figure ii: Audit Process

2. Minter Smart Contract ​to create fungible DGX tokens, that accepts or holds PoA Asset Cards in exchange for DGX tokens (Fig iii). Figure iii: Minting Digix Gold Asset Cards into Digix Gold Tokens

3. Recaster Smart Contract​, which is used to exchange DGX tokens back into PoA Asset cards. (Fig iv). Figure iv: Recasting Digix Gold Tokens into Digix Gold Asset Cards 4. Redemption Process​, for redeeming physical gold bar with PoA Asset cards. (Fig V). Figure V: Digix Gold Redemption and Token Based User Identification 5. Generic I/O Contracts, ​allowing developers to utilize PoA Cards or DGX tokens for Ðapp development.

Ethereum Smart Contracts Stack The diagram below shows the individual Digix smart contracts deployed on the Ethereum blockchain that make up the core processes above.

Digix’s Proof of Asset Participants (Blockchain Oracle Entities) Asset Vendor ValueMax Singapore, a publicly listed company, supplies London Bullion Market Association (LBMA3) certified gold bullion bars through the Digix Marketplace. Established in 1988, they provide pawnbroking services, retail and trading of pre­owned jewellery, gold and luxury timepieces. Independent Auditor Bureau Veritas Inspectorate will carry out quarterly checks on the quality and quantity at our custodian vault to ensure accounting is upheld. They are a multinational group with capabilities in an extensive range of commodities, providing independent inspection, sampling and testing services of precious metals. Every gold bullion is rigorously tested with precision instruments at Audit. We perform such measurements using Ultrasonic Gauge Measurements (UTM) and densometers. UTM is a method of performing non­destructive measurement (gauging) of the local thickness of a solid element basing on the time taken by the ultrasound wave to return to the surface. Densometers are devices that measure the density of objects with water displacement. Participating Custodian Vault Malca­Amit’s state of the art facility near Singapore Changi International Airport is located in the Le Freeport of Singapore, a 25,000 sqm high­security and climate­controlled facility featuring cutting edge security technologies enhanced by green building engineering. Multi­party Trust Mechanism The Digix system relies on multiple independent participants to provide a transparent platform for the tokenization of physical assets. We can assume that miners in a Proof of Work based crypto­currency system will act rationally, that is, that they would act in a way to maximize and protect their long term profits by performing their role of transaction verification. We assume that a cartel of rational miners would not collude to perform double spending attacks as such attacks would cause reputational damage to the entire system. We must therefore assume that in the Digix system which is the tri­party system consisting of asset providing vendors, the asset custodian in charge of storing and securing the asset from theft, and the auditor in charge of 3​ "​ LBMA ­ FAQs"​. The London Bullion Market Association.

ensuring the authenticity of the reported assets in custody are all acting in a rational manner who are trying to maximize their profits from the fees that they collect for their service. Mitigating Potential Points of Failure with Real World Governance Dishonest Entities and collusion in the chain of custody Digix works with entities in jurisdictions that provide stringent regulatory oversight and corporate governance. The entities we have engaged with are either publicly listed or well known in the industry for providing their niche service. Each entity that we have engaged with performs a separate function to prevent cheating. For instance, the asset vendor for physical assets cannot also be the asset custodian. The interest in the service has to be independent of one another. While the risk of collusion is a real possibility, it is at the cost of severe reputational and legal damages to the colluding participants. As these entities provide similar other services to other customers and such reputational and legal damages to their core business would be detrimental to their business, we can make a fair assumption that they will act in a rational manner. Key Benefits No centralised database management of Crypto Asset records All chain of custody information is fully managed by the Ethereum blockchain. This blockchain ledger is immutable with data upload taking significantly less time than on the Bitcoin blockchain.4 No Web­based log­in There is no web form log­in. Users will download desktop clients from Digix. The application itself can also be compiled from source on Github and is publicly auditable.​5​ There is significantly less chance of a Man in the Middle attack compared to traditional user web­based log­in.5 Secure Cold Storage of Crypto­Assets Digix’s Aegis Vaults is a cold storage wallet custodial service for crypto­assets and crypto currencies on Ethereum. Perpetual Existence of Digital Assets 4​ CryptoBond. (September 16, 2015) ​Why Is Ethereum Different to Bitcoin.​ CryptoCompare 5​ Hjemlvik, Erik. (​ March 27, 2011) Network Security Blog. “​Network Forensic Analysis of SSL MITM Attacks"​. NETRESEC

All asset data is recorded on the blockchain and exists indefinitely. Even if Digix folds, every proof generated can be verified and are admissible in a court of law in the applicable jurisdiction. Ex post facto Incentivization Mechanism The Proof of Asset process requires that regular quarterly or more frequent audits to be performed by a 3rd party auditor on the entire collection of gold assets held at the custodian vaults. The auditor performs a complete audit of each gold bar which includes verification of its authenticity, weight, and physical examination to detect anomalies or defects. The auditor submits a record on the Gold Registry contract for each and every single bar that has been audited, which contains an IPFS reference to a signed paper documentation, the auditor’s Ethereum identity, and a pass or fail result. Digix receives its revenues through the collection of transaction fees paid in the form of Digix gold tokens. These tokens are held in an escrow contract which can only release the tokens to a specified address after the successful completion of a 3rd party audit. Generic I/O Contracts and Ðapp Development Opportunities The generic I/O contract provided at Digix allows developers to utilize PoA Asset Cards or Digix tokens for Ðapp development and event logging. Our vision is to create an ecosystem for developers to utilize DGX tokens as a framework for various Ðapp developments. Code samples will be provided on our Github. Wealth Inheritance Dead man’s switch can be built as a service to allow wealth to be passed on in the form of Crypto Assets to the mentioned Ethereum address under the Digix system. Gamification In legal jurisdictions, DGX tokens can be used like bitcoin to facilitate in game currency or as gaming tokens.6 The PoA protocol can also be used for the issuance of digital gaming assets.7 Escrow DGX tokens can provide a better and less volatile store of value for Escrow services on the blockchain. 6​ Farivar, Cyrus ( January 22, 2013). "​ Bitcoin­based casino rakes in more than $500,000 profit in six months"​. Ars Technica. 7 ​Addison, Ian. (December 22, 2015) ​“Game­changers FreeMyVunk and Digix allow video gamers ..." ​IB Times.

Crowdfunding A Ðapp can provide crowdfunding opportunities with crypto­currencies and crypto­assets, or offer convertibility of cryptocurrencies to DGX tokens as a hedge to price volatility. Gold Backed Crypto Currency Developments Cryptocurrencies can stake a portion of its value with DGX Gold tokens and Gold Assets, backing its value with Gold. Crypto Exchanges and Wealth Management Ðapps When exchanges integrate DGX tokens as a cryptocurrency pair, they will be able to offer a gold hedge to cryptocurrencies as part of their service offering. Wealth management services that adjusts your cryptocurrency / crypto asset holdings can be developed to manage an individual’s crypto financial risk profile. P2P Lending and Microfinance Ðapps can utilize DGX Gold for peer to peer lending. A borrower can call for funding through a Ðapp based on his risk profile and reputation and negotiate a rate of return on the borrowed funds. Interest / yield payments can be serviced at regular intervals with a penalty system in place for late payments. This has already been done with bitcoin8, but due to the price volatility of cryptocurrencies, lenders may lose more of their asset value than what can be earned from the interest during the period of the loan. The price stability of DGX Gold Tokens can facilitate the adoption rate of such services. Collateral services Privately held assets can be safely and efficiently used as collateral without going through lengthy verification process to ascertain an asset’s existence and authenticity. Conclusion Digix will provide a transparent, audit friendly, safe protocol that leverages the full potential of Ethereum's decentralized consensus ecosystem and IPFS to facilitate crypto assets on the blockchain. 8​ Shieber, Jonathan (June 5, 2014). "​ BTCJam Brings Its Bitcoin­Based Lending Service To Emerging Markets"​. TechCrunch.

Digix白皮书:密码学资产中的黄金 准 prepared by: Anthony C. Eufemio <​[email protected]​> Kai C. Chng <​[email protected]​> Shaun Djie <​[email protected]​> V1.02 翻译:Ethfans­­少 摘要 Digix通过它的资产证明 PoA 协议为实体资产代币化和文档化提供了使用实例 PoA协议利用 以太坊9和星 文 系统 IPFS 10 通过监管链 chain of custody 追踪资产 它实现了开放和 公开的资产 在性认证,无需一个中心化数据 Digix也提供一个 用程序接口 API ,允许 其它 用建立在 们的资产代币化服务之 术总览: 产品生命周期: 9 ​ 文] 白皮书∙ ethereum/wiki Wiki ∙ GitHub​.​ "​ 2014. 29 Dec. 2015 ​[​ 英 10 ​B​ ​enet, Juan. (September 11 2015) ​“​ ​IPFS项目:它是如何 行的​".​ ​ I​ PFS

核心产品 1 资产证明 PoA 资产卡 PoA资产卡由以 信息构 ,被永久性地 传到去中心化数据 : ­ 资产卡创建时间戳 ­ 金条 单 SKU ­ 金条序 ­ 监管链数 签 供 商 托管商 审计商 ­ 购买收据 ­ 审计文档 ­ 储收据 ­ 储费用 PoA资产卡被保 在以太坊钱包中 2 Digix代币 DGX DGX代币通过铸币智能合约生 每个DGX代币代表1克黄金, 以细分到0.001克 每一个PoA 资产卡被发 到铸币智能合约时,相 的DGX代币就被发行出来 例如,用户发 一个100克黄 金的PoA卡到铸币智能合约,将获得100个DGX代币 Digix代币被保管在以太坊钱包 核心过程 3个模块过程—Digix使用它为一项资产提供 在证明和 代证明,1个实体资产赎回过程和1个 鼓励去中心化 用 Dapp 开发过程 些过程包括以 部分: 1. 资产证明 PoA 认证过程在以太坊 记录和提供一项资产的审计跟踪,用以创建PoA资产 卡 些资产卡通过来自于监管链参 者 即黄金供 商 托管商 审计商 的 续数 签 获 得认证,数 签 进一 通过被提供和 传到IPFS所永久保 起来的购买和 储收据证明所确 认 图表 i :Digix资产注 过程

PoA认证包括一个 期审计子过程,如图表ii所示 图表ii:审计过程

2 铸币智能合约,创建 代的DGX代币,它接 或持有PoA资产卡,向用户返回DGX代币 图表iii:将Digix黄金资产卡铸为Digix黄金代币

3 重铸智能合约,将DGX代币重铸为PoA资产卡 图表iv 图表iv:将Digix黄金代币重铸为Digix黄金资产卡 4 赎回过程,利用PoA资产卡赎回实体金条 图表v 图表V:Digix黄金赎回和基于代币的用户身份证明

5 通用输入/输出 I/O 合约, 行开发者利用PoA资产卡或者DGX代币进行去中心化 用 Dapp 开发 以太坊智能合约 ​ ​ 面的图表展示了包含以 过程的Digix智能合约如何部署在以太坊区块链

Digix资产证明参 者 区块链线 实体 资产供 商 ValueMax 加坡是一家 市公 ,在Digix市场 提供伦敦金银市场协会 LBMA11 认 的金 条 ValueMax 加坡 立于1988 ,他们提供典当服务和 手珠 黄金 表的零售和交易 服务 独立审计商 Bureau Veritas Inspectorate将对 们的黄金托管商 金条的重量和 量进行季度审计,确保 DGX代币有实体黄金支撑 他们是一家跨国集团,涉足多个商品领域,为贵金属提供独立的检 查 样和检测服务 每个金条在审计时都将被用机密检查设备严格地检测 们使用超声波计量器 UTM 和密度计 执行 些检测 UTM是一种基于超声波返回物体表面所用时间测量物体局部厚度的无损测量方 式 密度计是使用排水量测量物体密度的设备 托管商保险 MalcaAmit的现代化设备靠 ​ 加坡樟 国 机场, 于 加坡自由港,它是一个面积达25000 方 米的高度安全和 空调控制温度的保险 ,以通过绿色建筑工程实现的 前沿安全 术著称 多方信任机制 Digix依赖多方独立的参 者为实体资产代币化提供一个透明的 们 以假 基于工作量证明 PoW 的密码学 币系统中的矿工将理性行动,即他们将通过履行交易确认职 ,实现收益 大化和 保 他们的长期利润 们假设,理性矿工的垄断联盟将 会合谋进行 花攻击,因为 样的攻击将 造 整个系统的声誉 损 们因 假设Digix系统中 个参 方­­负 提供黄金的供 商 负 保管 和保证资产安全的托管商 负 保证托管商资产的真实性,都将以理性的方式行 ,通过收 服务费 用实现利用 大化 利用现实世界的管理解 潜在的单点故障 11 ​“​ ​LBMA​常见 题"​.​ ​l伦敦金银市场协会

监管链 诚实的参 者和共谋 Digix​ 提供严格监管和公 管理的公 合作 们的合作公 是 市公 就是因他们的专业服务而 在行业知 的公 为了方式欺诈, 们的合作每个公 只能从 一种只能 例如,实体资产供 商 能 充当资产托管商 一项服务的利益必须独立另一项服务 尽管共谋的风险是真实 在的,但是 对于共谋者来说,信誉和法律 本是极高的 因为 些公 为其他顾客提供类似的其它服务,核心 业务的信誉和合法性 损对他们是有害无利的, 们 以做一个合理的假设,他们将以理性的方式行 核心益处 没有中心化数据管理加密资产记录 所有的监管链信息完全由以太坊区块链管理 个区块链 本以永久 传数据,花费的时间也明显少 于在比特币区块链 传数据 12 没有基于网页的登 没有网页形式的登 用户将从Digix 载桌面客户端 个 用也 以从Github 的源代码编译出来 ,公开 审计 传统的基于网页的用户登 相比,Digix的用户登 方式极大地降 了中间人攻击13 安全的加密资产冷 储 Digix的 盾保险 是以太坊 面的密码学资产和密码学 币的冷 储钱包托管服务 数 资产永久 在 所有的资产都被记录在区块链 ,永久 在 即使Digix倒 ,已经生 的每个证明在 用的 法辖区 以被法庭 认和采纳 激励机制 12 ​CryptoBond. (September 16, 2015)为什么以太坊 于比特币?​.​ ​CryptoCompare 13 ​Hjemlvik, Erik.​ ​(​ ​March 27, 2011) 网络安全博客. “​SSL MITM攻击的网络分析"​.​ ​NETRESEC

资产证明过程要求常规的季度审计或者更加频繁的审计需要由第 方审计商执行,审计商需要对托管 商保险 中所有的黄金资产进行审计 审计商对每个金条进行一次完整审计,包括核实金条的真实 性 重量和物理检测,以检测异常和 合格品 审计商为已经审计过的每个金条在黄金登记合约 提 交一份记录,该记录包含对签 的纸 文档的一个IPFS引用 审计商在以太坊 的身份信息和是否通 过审计 Digix通过交易费用获得收入,交易费是用Digix黄金代币支付的 些代币被保 在一个代理合约 ,只有经过第 方审计 些代币 以被发 到一个特 地址 通用输入/输出 I/O 合约和去中心化 用 Dapp 开发机会 Digix提供的通用I/O合约允许开发者将PoA资产卡或者Digix代币进行于Dapp开发和 记录 们的愿景是为开发者创建一个生态系统,将DGX代币用作各种各样的Dapp开发的架构 代码例子 将在 们的Github 提供 富继 去世用户的 产转移 以被做 一项服务,允许 富以密码学资产的形式被转移到Digix系统中被 提到的以太坊地址 博彩 在 法辖区,DGX黄金代币 以像比特币一样,被用作博彩 币或者博彩代币14 PoA协议也 以被 用于数 博彩资产的发行 7 15 代理 DGX代币 以区块链 的代理服务提供一个更好的 波动更小的 值储 手段 众筹 Dapp利用密码学 币和密码学资产 以提供众筹机会,或者将密码学 币转换为DGX代币,对 格波动 14 ​Farivar, Cyrus ( January 22, 2013).​ ​"​ ​Bitcoin​based casino rakes in more than $500,000 profit in six months"​.​ ​Ars Technica. 15 ​Addison, Ian. (December 22, 2015)​ ​“​ ​Game​changers FreeMyVunk and Digix allow video gamers ..."​ ​I​ ​B Times.

由黄金支持的密码学 币开发 密码学 币 以利用DGX黄金代币和黄金资产支持它的部分 值 交易所和 富管理Dapp 当交易所整合DGX代币作为密码学 币交易对的一方时,它们将能够为密码学 币提供 黄金对 的服务 开发能够调整你的密码学 币/密码学资产的比例 富管理服务,管理个人的密码学金 融资产风险 点对点 P2P 借贷和微金融 App​ 以将DGX黄金代币 用到P2P借贷 借款人 以通过一个基于他的风险组合和信誉的Dapp 寻 资金,并和出借人商 一个资金回 率 利息/收益支付 以每隔一段时间付一次, 要有一 套惩罚系统,支付 了要收到惩罚 些已经在比特币 实现了16 ,但是由于密码学 币的 格 波动,在债务期出借人损失的资产 值 能比获得的利息 值更多 在DGX黄金代币的 格稳 将促 些服务的 用 抵押服务 私人持有的资产 以安全有效地被用作抵押品, 用通过冗长的认证过程确 一项资产的 在性和真 实性 结论 Digix​将提供一个透明 对审计 好 安全的协议,该协议利用以太坊的去中心化共识系统和IPFS 的全部潜力在区块链 实现密码学资产 16 ​Shieber, Jonathan (June 5, 2014).​ "​ BTCJam Brings Its Bitcoin​Based Lending Service To Emerging Markets"​. TechCrunch.