465,134, worth about $134 million, have moved today for a fee of just 29 cent as a DGD token holders vote passes, giving Digix the green-light to liquidate $20 million worth of eth.
Digix has stated the eth will be liquidated in trenches to avoid any potential front-running. A representative from Digix Global publicly said:
“All of the ETH will be sold via OTC market makers, and will not be done in one full tranche so as to prevent us from being front runned.” They further add:
“We are seeking treasury management services for the ETH. It is likely to be composed of a mixture of Fiat/DGX/DAI.”
How they ended up so quickly at Gemini, therefore, is unclear, with ◊15,000 of the ◊70,000 still remaining at what we’ll call the treasury account.
It may be the case the ◊54,000 is not yet sold, but has just been readied for it, or, of course, maybe they have quickly turned them into fiat.
A tokenholders vote on a request by Digix Global for $20 million to expand their operations closed today with it passing almost unanimously.
As can be seen, more than 600,000 DGD have voted, or roughly 30% of the 2 million DGD. Making it one of the highest turnout we’ve seen with the vote lasting for two weeks.
DGD’s ownership is however fairly concentrated, with the top 20 accounts holding around 50% of all DGD tokens.
In theory, therefore, the vote could have passed with just the top five token holders, although Digix said they did not vote so top seven might be more realistic.
There is no evidence to suggest that was the case, with 195 accounts voting, but the proposal appeared to be a bit controversial with some requesting more detail. Yet it generally seemed to have most in support of approving the request.
Some suggested they could use the eth as collateral for Dai, thus allowing them to spend Dai as and when needed, but the Digix Global representative said:
“We are not intending to speculate with this amount of monies. Sure we can do that with a small % of ETH as a show of support and alliance with the MakerDAO team, but truly, we need to be certain of the cash flow for the next 3 years.”
Someone had an even more interesting proposal of using the funds to buy back DGD tokens with those tokens then sold as and when needed, with the representative stating:
“That is a possibility and a good idea. However, we need to check with our legal counsel and obtain written advise from a law firm before proceeding, as there might be conflicts of interest in doing so. If possible, we will look to hold a mix of fiat/Dai/dgx.”
The total market cap of DGD is currently about $30 million lower than the amount of eth the project maintains, but token projects are not utilizing some of that eth to keep a level of price support for their tokens.
Nor does it look like DGD will do so, at least with the majority of the ◊70,000 considering ◊54,000 has been sent to Gemini, but what their plans are for the remaining ◊15,000 is currently unclear.