1/28 Today we announced the go-live for trading of #DGLD on our exchange, @BlockchainPIT. You can see it here:
pit.blockchain.com/trade/DGLD-BTC
This is just one step in the ongoing rollout of the DGLD protocol, in partnership with @blockchain, @CoinSharesCo, and @MKSPAMPGROUP
pit.blockchain.com/trade/DGLD-BTC
This is just one step in the ongoing rollout of the DGLD protocol, in partnership with @blockchain, @CoinSharesCo, and @MKSPAMPGROUP
2/28 DGLD is a digital representation of title to specific allocated gold bullion in the vaults of MKS (leading global refiner) in Switzerland. Think of it not so much as a gold-backed-token but rather as a literal, redeemable, digital vault receipt to actual, specific metal.
5/28 Before we get into the implications of tokenised gold, perhaps a bit of refresher on "gold valuation and market significance" is in order. Just my opinions (WTH do I know 🤷♂️🤷♂️🤷♂️, but here goes...)
6/28 Over the years, speaking with many many clients (was global head of metals at @GoldmanSachs in previous life), I've noticed #gold is one of the most polarising financial instruments, eliciting strong emotional reactions. Maybe even more so than crypto.
7/28 Some people love #gold, others simply don't understand what its good for. There's alot of confusion, even amongst professional investors, as to what gold is and how to price/value it.
8/28 Here's a scattering of ideas about #gold that people throw around and then try to model (!) in order to get a to a view on valuation 👇
9/28 #Gold as:
✅"countryless" currency
✅insurance against systemic risk
✅reserve-standard-in-waiting, ie the "anti-USD"
✅default swap on sovereign debt
✅commodity like any other with production cost structure and supply/demand resulting in surplus/deficits that drive prices
✅"countryless" currency
✅insurance against systemic risk
✅reserve-standard-in-waiting, ie the "anti-USD"
✅default swap on sovereign debt
✅commodity like any other with production cost structure and supply/demand resulting in surplus/deficits that drive prices
10/28 ...And then there's the crowd of emotional folks who insist it is a useless "pet rock" 🐶
Side note: these folks tend to love levering up in equities, and are usually the vocal BTFD people 🧐
(That's worked for the last decade... but we'll see about the next one)
Side note: these folks tend to love levering up in equities, and are usually the vocal BTFD people 🧐
(That's worked for the last decade... but we'll see about the next one)
14/28 We can measure this opportunity cost by looking at riskless real yields, which represent the market's overall view of the generic marginal product of deployed capital. Indeed the correlation between gold and long term real yields is very strong, eyeballing at perhaps 80+% 
15/28 And as long as we are talking about pricing, my opinion (everybody's got one 💪) is that real yields are going to stay low for a long time as policymakers wage war on inequality, which, btw, is the same thing as saying wage war on capital 😉
16/28 Fed already tried to hike and couldn't. And yet the fiscal spend is coming, so if nominal growth picks up, inflation will too, thus keeping real yields low.
#Gold should remain an attractive asset from here despite the talking heads recently pitching growth again as usual
#Gold should remain an attractive asset from here despite the talking heads recently pitching growth again as usual
17/28 Back to #DGLD: "safe capital reserve asset" as an idea basically sums up the institutional gold market as it is today... central banks, diversified asset managers, ETPs, etc.
19/28 With the right #DGLD wallet integrations (👋 @Blockchain Wallet), #gold can become a much higher velocity P2P asset, and anyone with a compliant KYC'd wallet can hold their own keys, thus holding, sending, and receiving fine metal in Switzerland any time they like.
20/28 And with good UX and fiat bridges, the on-ramp to safely protecting your assets will be smoother than ever before. Big win for property rights and financial resilience/safety/soundness to have this accessible in the toolkit.
21/28 Imagine how different the world will be when people have a fast and credible means always at the ready to seamlessly place and protect capital safely in a trusted jurisdiction.
(Remember trying to buy physical gold coins in Midtown during the height of the GFC? Not easy!)
(Remember trying to buy physical gold coins in Midtown during the height of the GFC? Not easy!)
22/28 And, unlike traditional cryptos, for new users of these technologies its a really straightforward answer to the "yeah its cool... but where's my money?!" question that is a hurdle to get past before feeling confident adopting digital assets.
23/28 For example, new #Bitcoin users need to learn how control over UTXOs in the cloud via private key possession is the same as owning value... Its super cool, obvs, but admittedly very hard to grok as a newbie...
24/28 ...But for the next 100 million digital asset users, perhaps "your gold is in the vaults of, @MKSPAMPGROUP the most reputable precious refinery in Switzerland... and all you have to do is redeem your keys to access it" is an easier sell? ...Yeah.
25/28 Finally, all the usual benefits of #tokenisation pertain here, as with other digital assets: #gold is now fractionalised, easy to store, transport, and transmit. (#DGLD's side chain validates blocks quickly, making it viable as medium-of-exchange)
26/28 Worth mentioning as well that the whitelisting address architecture the project has chosen means #DGLD is explicitly designed to help facilitate financial crime prevention and ensure provenance of the metal is free from conflict minerals etc.
27/28 Put differently, the protocol is built to last and be compatible with existing financial systems. While this may prevent a small subset from using it, it also means DGLD is fit to accommodate the much larger capital flows required to eventually become a global standard.
