Digital Gold

Digital Gold (DGLD) is a blockchain-based token that represents direct ownership of physical gold stored in insured Swiss vaults. Each DGLD token corresponds to one troy ounce of LBMA-certified gold, providing holders with a verifiable and secure digital proof of ownership. Initially launched in 2019 on a Bitcoin sidechain, DGLD transitioned to the Ethereum network in 2022 as an ERC-20 token to improve accessibility and compatibility with blockchain-based financial applications.

DGLD was developed by Gold Token SA (GTSA), a Swiss-based entity focused on hard-asset tokenisation. The project was created in collaboration with MKS PAMP Group, a global leader in precious metals, and CoinShares, a digital asset investment firm. The token is designed to provide direct ownership of physical gold without reliance on intermediaries.

DGLD enables users to own, transfer, and trade investment-grade gold in a digital format. The primary use cases include:

• Gold Investment: DGLD provides a direct, legally recognised claim to physical gold, allowing investors to gain exposure to gold’s value without dealing with storage or security concerns.
• Blockchain-Based Financial Applications: As an ERC-20 token, DGLD can be used in smart contract platforms, including lending, borrowing, and liquidity management.
• Settlement and Transfers: DGLD can be transferred across blockchain networks without reliance on traditional financial institutions.
• Physical Redemption: Holders can redeem DGLD for allocated gold, either in full gold bars or in smaller denominations through Gold Avenue, an online precious metals retailer.

The token operates with no custody or transaction fees imposed by GTSA, apart from Ethereum network gas fees.

DGLD was developed by Gold Token SA (GTSA), a Geneva-based company specialising in hard-asset tokenisation and issuance. GTSA was established as a joint venture between CoinShares International Ltd, Europe’s largest digital asset manager, and MKS PAMP, a Swiss-based leader in the precious metals industry. DGLD represents digital ownership rights over physical gold bullion bars.

Key People and Partners:

• MKS PAMP Group: A global precious metals company responsible for gold sourcing, refining, and secure storage.
• CoinShares: Europe’s largest digital asset investment firm, providing expertise in blockchain-based financial products.
• James Bennett (CEO, Gold Token SA): Former CEO of ByteTree Group, where he led the development of data-driven digital asset investment products, including a bitcoin-gold investment vehicle.
• Daniel Masters (Director, CoinShares): Chairman of CoinShares International Ltd, with over 30 years of experience in global energy trading and digital asset management.
• Marwan Shakarchi (Chairman, MKS PAMP Group): CEO of MKS PAMP since 1983, a recognised authority in the global gold and precious metals industry, and an advisor to the Shanghai Gold Exchange.

Originally launched on a Bitcoin-based sidechain, DGLD migrated to Ethereum in November 2022 to ensure compatibility with Ethereum-based applications. Key points of the migration included:

• Transition from Bitcoin Sidechain to Ethereum: The original DGLD token ceased to exist, and all wrapped DGLD (wDGLD) tokens on Ethereum were replaced with the new ERC-20 DGLD token.
• Updated Token Structure: The unit of measurement changed from 1 DGLD representing 1/10th of a troy ounce to 1 DGLD representing 1 full troy ounce.
• Automatic Airdrop: Holders of wDGLD received the new DGLD ERC-20 token automatically.
• No Custody Fees: Unlike the previous version, which incurred a 100 basis point annual fee, the new DGLD token does not have additional holding costs.

This migration allowed DGLD to integrate with Ethereum-based financial applications and increased accessibility for users.

All gold backing DGLD is physically stored in high-security Swiss vaults operated by MKS PAMP Group. Investors can verify their holdings through the DGLD bar mapping tool, which links each token to a specific gold bar. Key security measures include:

• LBMA Good Delivery Gold: Ensures quality and traceability of the gold backing each DGLD token.
• Publicly Verifiable Records: The blockchain provides a transparent ledger of token circulation and ownership.
• Regulatory Oversight: DGLD is classified as a commodity-backed payment token under FINMA guidelines, ensuring compliance with Swiss financial regulations.

DGLD is an ERC-20 token operating on the Ethereum Virtual Machine (EVM). Its smart contract incorporates key functionalities, including:

• Minting and Burning: New DGLD tokens are only minted when physical gold is allocated in the vault, and tokens can be burned upon redemption for physical gold.
• On-Chain Transparency: The token supply and ownership are verifiable on the blockchain.
• Compatibility with Smart Contracts: DGLD can be integrated into decentralised applications and blockchain-based financial services.

DGLD operates under Swiss regulatory oversight with:

• FINMA Classification: Recognised as a payment token linked to commodities with ownership rights.
• VQF Compliance Audits: Ensures adherence to Swiss financial market standards.
• Grant Thornton Audits: Provides independent verification of physical gold holdings and token issuance.
• Asset Integrity Certificates: Each allocated gold bar has a unique certificate detailing its origin, custodian, and quality.