DigixDAO proposes full dissolution returning over $50 million to DGX holders

Digix Global, the company behind the Digix gold-backed token, has integrated a dissolution mechanism that will enable the token holders to vote on liquidating the project's treasury which contains 386,428 ETH. If the vote doesn't pass, the DigixDAO will continue functioning and the treasury will continue to be used to fund projects aiding the ecosystem, however, the dissolution mechanism will once again be voted on the following quarter. If it does pass all DGD holders will receive their pro-rata share of ETH and the DigixDAO will cease to exist. Digix and the DGX gold token will continue to operate, but the DAO coordinating funding for the project will not.

Why it Matters

• Despite the price increasing from $11 to $19 over the last three weeks, the $39.5 million market capitalization is still below the $54 million liquidation value of the ETH. This creates an arbitrage opportunity as the ETH received will be worth more than the cost of the token. The spread is likely due to the discount given to probability the proposal doesn't get passed. However, the recent price run-up suggests buyers are purchasing for this reason and they will be the ones voting for it.
• Digix Global was one of the early ICOs, raising $5.5 million in 2016. With the price-run up in ETH, the treasury increased by an order of magnitude creating more funds than the project could realistically utilize. Digix isn't the only project in this position, and as many token prices have plummeted look for teams to find creative ways to use treasury balances to return value to token holders.

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