This Blockchain Startup Launches Diamond-Backed Token That Lets You Buy Discounted Physical Diamonds

While the cryptocurrency market has moved away from its record levels, the market has become more stable and mature. Amid the recent long-term correction, the main winners have been stablecoins and security tokens – two phenomena that pledged to transform the payments and securities markets.

diamDEXX, a blockchain-oriented startup, decided to join the crypto bandwagon and combine the benefits of both forms of digital currencies. Thus, the team has been working on a cryptocurrency ecosystem that revolves around DIAM coin, an Ethereum-powered token backed by physical diamonds, that allows you to purchase them in a manufacturer price.

What’s the Problem with Typical Stablecoins?
While stablecoins directly address the high volatility issues, which have been so common in the crypto space, they are not immune to failure. Fiat-backed tokens, such as Tether’s USDT, Circle’s USDC or TrueUSD, are highly dependent on the performance of the US dollar or the currency they are pegged to. These stablecoins will do well as soon as the American currency continues to maintain its position as the world reserve currency, but the USD dominance might fade away at some point, especially when China and Russia are ready to push the BRICS association against the US.

But even when the US dollar maintains its world dominance, it is slowly but steadily losing its purchasing power. Starting with 1913, when the Federal Reserve System was created, the USD has lost over 95% of its purchasing power, and the trend continues till this day due to inflation.

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It suggests that stablecoins holders are losing value in the long-term. In order to preserve the value amid the ups and downs of the market cycles, diamDEXX proposes a diamond-backed coin that would combat the USD volatility by ensuring holders it is backed by physical diamonds, a common store of value.

The diamDEXX Ecosystem
diamDEXX, led by CEO Jeremy Dahan, has developed its platform since 2018. The ecosystem comprises three key elements:

• DIAM – a stablecoin pegged to the USD based on a ratio of 1:1. To ensure stability in the long term, the coin is backed by $150 million worth of physical diamonds and adjusts its holdings according to supply and demand. 
• DiamDrop – an online platform where users can redeem their coins for diamonds at discount prices. 
• diamDEXX – a sophisticated digital wallet built under the ERC-20 standard but allows the holdings of BNB and BTC as well.

diamDEXX is very serious about provenance, which has always been a problem in the diamond market. Thus, all assets are certified, audited, and backed by smart contracts. The diamonds are stored in 5 tax-free jurisdictions, where they are verified.

The DIAM coin is not for speculators who seek short-term gains but rather for experienced investors who want to preserve value in the long-term. diamDEXX’s solution is a win-win for both crypto investors and the diamond industry, which has been illiquid for decades due to the different forms of barriers, such as diamantaires or high prices. The DIAM coin will bring more liquidity as it allows investors to buy fractions of diamonds. This approach is typical for security tokens, especially those related to real estate.

Recently, diamDEXX partnered with the International Diamond Exchange (IDEX), the leading diamond trading platform aimed at professional traders. IDEX provides online listings in real-time and uses a proprietary online transaction clearing feature. Thus, DIAM holders can choose to redeem their coins for physical diamonds or hold them in IDEX’s custody. On top of that, IDEX is actively auditing diamDEXX's smart vaults.

diamDEXX’s blockchain solution contributes to the mainstream adoption of cryptocurrency and demonstrates a successful use case for stablecoins. The DIAM coin is an example of how the stablecoin space is moving in the right direction. It enables more liquidity in the diamond market and allows investors to rely on a safe haven asset with long-term potential.

Image sourced from Pixabay