What gives DigiGuldens value?
Our goal is to make DigiGuldens available to all Dutch people. Enough DigiGuldens have been created to be used; thus, there are about 150,000 DigiGuldens available per Dutch citizen. Of course, the DigiGuldens will only gain value when they begin to be used by a large group of users. That is why it is important that the DigiGuldens will be owned by as many users as possible, not just a few wealthy investors.
“Stable price over a long period of time”
You may have noticed that Crypto values can fluctuate wildly. Often the interest of those who have already bought in is to drive up the price as much as possible for quick profits. We do not want this with the DigiGulden, which is why we guarantee that the DigiGuldens will remain available for a stable price over an extended period of time.
To eliminate price manipulation as much as possible, the foundation will sell DigiGuldens on a set schedule. The scheme is divided into 8 phases; in the first phase, by far the most DigiGuldens are available at a very low price. This gives every user a fair chance to own a fair number of DigiGuldens. The effect we want to achieve with this is that the DigiGuldens get into the hands of as many users and Dutch people as proportionally as possible. This is essential because it helps increase support and momentum for the market to accept DigiGuldens as a payment method.
When all available DigiGuldens from phase one are sold, the next phase will begin. In this new phase, a smaller number of DigiGuldens will be available compared to the previous phase and the price will also be higher. This process continues until all DigiGuldens from phase 8 are sold. The foundation will then have sold 55% of all available DigiGuldens. After this, the foundation will no longer sell DigiGuldens and thus release price regulation after which the market will determine the price through supply and demand. More details can be found in the whitepaper.
The remaining 45% of the DigiGuldens will be issued by the Foundation over a period of 40 years in the form of staking rewards for those who actively contribute to the Radix network by allocating stake to the DigiGulden validation server or those of its partners. Through these “staking rewards,” the foundation guarantees a stable and healthy inflation rate of +/- 1.5% annually over a period of 40 years.
“Everyone can benefit equally”
Why are there 2550 billion DigiGuldens?
2550 billion is a huge number, far more than, say, the 21 million Bitcoins that will ever exist. Nevertheless, we felt this was necessary because the DigiGulden is the first crypto suitable as a means of payment. Two things were important in arriving at this number; the number of users (17 million) and the average wealth in euros per Dutch citizen (about 150,000). We decided to use these figures during the development of the DigiGulden.
“Maintain same order of magnitude”
To illustrate why it is important to stick to this order of magnitude, below is an example of Bitcoin; there can only be a maximum of 21 million of these with the result that the price of a Bitcoin in Euros is huge. Checking out a coffee at the gas station will then cost you 0.00004 Bitcoin, for example. You see, that is impractical. By aligning the numbers of DigiGuldens with the number of Euros held by the Netherlands, we keep the same order of magnitude which in time will make usage a lot more intuitive.
What is Radix?
DigiGulden runs on Radix’s global network. Because we use this network for global, decentralized, fast and cheap transactions, every transaction requires payment to everyone who keeps this network running. These payments are not made in DigiGuldens but in Radix tokens. The costs of a transaction won’t cost more than a few eurocents.
DigiGulden validation server
The DigiGulden uses Radix’s global network. The Radix network is under development and is expected to be capable of handling thousands of transactions per second very cheaply and securely by 2024 while operating completely decentralized. This makes Radix the best choice to base the DigiGulden on.
To actively contribute to the security and stability of the Radix network, the DigiGulden Foundation has a validator in the Radix network. Owners of Radix tokens that allocate stake to the DigiGulden validator will be rewarded with DigiGulden payments. And 3,000 billion tokens have been made available for these rewards. Everyone delegator receives the number of staked Radix tokens each month in DigiGuldens. So someone who stakes 100,000 Radix for a full month will receive 100,000 DigiGuldens monthly for this.