Markets • January 21, 2020, 11:46AM EST

Digix likely to distribute $64M in ETH to DAO token holders via smart contract, says rep

Quick Take

DigixDAO is dissolving following a vote.
DGD token holders voted to liquidate DigixDAO’s $64 million worth of ether (ETH) treasury
Notably, Digix Global and its other token, DGX, will continue to operate as a private endeavor

DigixDAO, a decentralized autonomous organization responsible for making decisions about the Digix ecosystem, is set to dissolve following a governance vote.

The decision has been taken as DGD token holders voted to liquidate DigixDAO’s $64 million worth of ether (ETH) treasury – the initiative is known as Project Ragnarok. DigixDAO currently holds 386,159 ETH, according to two addresses on Etherscan.

A Digix representative told The Block on Tuesday that the funding requested through the dissolution shall be for all of the current ETH in DigixDAO.

"After unlocking their DGD from DigixDAO, DGD token holders will be able to claim a pro-rated portion of remaining ETH in DigixDAO depending on the amount of DGD they hold. The amount of ETH available for claim would be taken as at the end of the current DigixDAO quarter. The claiming process will likely be through a smart contract which Digix will make available in due course," the representative added.

DigixDAO raised over 460,000 ETHs in 2016 via an initial coin offering (ICO). In total, the amount of ETH was worth about $5.5 million at the time. However, its value has since gone up significantly. DGD token, on the other hand, was trading at a 60% discount to DigixDAO's treasury balance last month. Thus, DigixDAO gave DGD token holders an option to completely dissolve its treasury.

The voting passage news, however, has shot up the price of DGD token by around 17% in the last 24 hours and is currently trading at around $31, according to CoinGecko.

Its market cap stands at $62 million as compared to ~$23 million at one point last month.

Voting details

DGD token holders passed the vote to liquidate DigixDAO’s ETH treasury with over 95 percent support, according to Digix community site. With the passage, 0.19 ETH per DGD will be given back to DGD token holders, DigixDAO said in a tweet on Monday.

Source: Digix Community

DigixGlobal offered to dissolve DigixDAO last month in the wake of community requests. "One recurring comment was for a mechanism for dissatisfied DGD token holders to make a clean break from DigixDAO,” Kai Cheng Chng, CEO of Digix, said at the time.

The dissolution of the DAO aside, Digix Global and its other token, DGX, will continue to operate as a private endeavor.

More projects could reportedly follow DigixDAO's move. "The space needs a Carl Icahn–like personality to call these teams out and propagate a culture in our industry where it's not OK to just sit on tens and even hundreds of millions of dollars in investor capital," Ryan Zurrer, founder of Swiss crypto-asset firm Dialectic, told CoinDesk last month, adding: “I'm optimistic that 2020 is going to bring a number of this type of situation to the fore.”

Digix, however, is open to creating another DAO in the future, according to Project-Ragnarok's FAQs shared with The Block by the representative.

"If the team sees enough feedback from the community to create another DAO in the future, Digix will be open to explore all options that will both benefit the community and further develop the DGX ecosystem," it states.

Project Ragnarok FAQ by MichaelPatrickMcSweeney on Scribd