100 million DGTX tokens (10% of the total supply of DGTX) are locked up in the Digitex Treasury smart contract. Starting on March 1st 2019, the Digitex Treasury smart contract releases 10 million DGTX tokens every 3 months and sells them in an ongoing public token sale.
The price is determined by us and can be adjusted once per hour. Token sales will not be open to residents of the US, North Korean, Iran, Cyprus, and Malta. The reason for this is to do with regulations that we cannot side-step.
To purchase DGTX tokens you send Ether (ETH) from your Ethereum wallet to our token sale smart contract address. Upon receiving your payment the smart contract calculates how many DGTX tokens you get and automatically sends them back to the same Ethereum wallet address. Your transaction is instant and trustless. Don’t send Ether from a cryptocurrency exchange wallet that does not accept DGTX or your tokens will be lost.
There are three phases of revenue generation for the Digitex Futures Exchange. The first was our ICO token sale on January 15th, 2018 which sold out in 17 minutes and raised over $5m. The second and current phase is the Digitex Treasury token sale which will last until 2021. The third phase being Token Issuance, starts mid 2021.
DGTX Token Issuance
Starting in 2021, Digitex covers its costs by Mining new DGTX Tokens. This token issuance revenue model removes the cost burden of the exchange from the most active traders who provide the most liquidity. And it spreads that cost evenly amongst all DGTX owners in the form of a small inflation rate. Any increase in DGTX supply will devalue the current price of DGTX. But by using a democratic system of decentralised governance by blockchain, DGTX token owners control that inflation cost.
Why is the Treasury Token Price Lower Than The Market Price
The Treasury token price is intended to be higher than the market price, and is intended for those who are interested in holding the token long-term. However, the Treasury token price is manually set, and has a 15 minute delay after setting before it updates on the Treasury web page. For this reason, in a quick moving market the market price might spike to a price that's higher than the Treasury price. When that happens we can only react and wait for the Treasury price to update. During these windows there is an opportunity for arbitage, but this is not intentional and is simply an effect of how the smart contact is designed.
The Revenue Model of Token Issuance
We follow a revenue model of token issuance in a community-controlled way. So, rather than just giving the team a license to print money and wipe off value from the exchange token through inflation, we will mint a small number of exchange tokens every couple of years based on a community vote. This is done so that we can bring more users onto the exchange, through effective marketing, and fund development, always in a controlled way to offset a temporary drop in exchange token value from inflation with rising demand for DGTX as more traders flock to our commission-free exchange.
We created one billion tokens in our ICO last year and the first scheduled minting of new DGTX as per the white paper is scheduled for 2021. This new round of DGTX issuance will be governed democratically by all DGTX exchange token owners.
The benefits of adding more users to our exchange are multiple and far outweigh the temporary effects of inflation. For example, a substantial increase in people holding DGTX tokens not only makes the token price rise but it also makes our democratic token-issuance voting system more robust.
The more participants there are in the voting ecosystem, the better it will be since it ensures fairness and will allow us to make sounder decisions as a collective.
Why would DGTX token owners willingly vote to increase supply and devalue their DGTX tokens?
Because by doing so they are funding a commission-free, non-custodial futures exchange that creates massive demand for DGTX. Increased demand for DGTX from traders will counteract the effect of increased supply, and this constant balancing act of inflation vs demand will be done by the very people who are affected by it: DGTX token owners.
On the one hand, DGTX owners want to minimize token issuance to protect the value of the current DGTX. But on the other hand, DGTX owners will accept a certain devaluation of their DGTX if that raises enough money to fund the Digitex Futures Exchange for another year, thus creating increased demand for DGTX from traders attracted to commission-free markets on a non-custodial exchange.
Just like any central bank that controls its own currency through effective monetary policy, the DGTX community will collectively decide on the most appropriate monetary policy that finds the correct balance between DGTX demand, price growth and inflation.