Digix’s Whitepaper: The Gold Standard in CryptoAssets (English / 中文)
prepared by:
Anthony C. Eufemio
Kai C. Chng
Shaun Djie
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 Ethereum and the InterPlanetary
Files System (IPFS) 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.
2
1
Product Life Cycle
Technical Overview:
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
an asset, 1 for redemption of physical assets, and 1 that encourages Ðapp Development. Those
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)
3
Asset Vendor
ValueMax Singapore, a publicly listed company, supplies London Bullion Market Association
(LBMA ) 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.