Designed and developed by fintech COTI, the algorithmic stablecoin DJED should see the light of day next week on the Cardano (ADA) blockchain. The DJED will be anchored to the US dollar, and will be insured by both ADA and SHEN, a token available for staking which will allow you to receive part of the fees collected in the mint and burn processes of the stablecoin.
DJED is coming to Cardano soon
The DJED stablecoin will therefore be the first stablecoin developed specifically for the Cardano (ADA) blockchain, since it should be available next week.
Designed and developed by the fintech COTI, specialized in the digitization of currencies and in the creation of digital payment solutions, the DJED will be an algorithmic stablecoin whose over-collateralisation should be maintained between 400 and 800%according to the available documentation.
We are pleased to share another update about Djed’s progress and to inform you that the launch is scheduled for next week!
Read more: https://t.co/7kPjfGMNmk$DJED $COTI @InputOutputHK @Cardano pic.twitter.com/mHA5KVblay
— COTI (@COTInetwork) January 24, 2023
“We are happy to share a new update on the progress of Djed and let you know that the launch is scheduled for next week! »
This very substantial over-collateralisation should theoretically allow to avoid a scenario similar to that of Terra (LUNA) that we were able to observe in May 2022, which resulted from a simultaneous decline in LUNA and UST, the 2 cryptocurrencies being closely linked before their collapse.
For simplicity, an algorithmic stablecoin is structured to self-regulate to ensure parity with its reference asset, often the US dollar. The algorithm must make it possible to buy stablecoins when the price is down, and, on the contrary, to sell them when the price is up.
Note, however, that this is not Cardano’s “official” stablecoin, since the blockchain should issue its own via Emurgo during the first quarter of the year as part of the launch of its Azens product line. USDA baptizedit should be entirely backed by a reserve in US dollars, unlike the DJED which will be backed by ADA.
👉 Find the best ways to invest in Cardano ADA
The platform that simplifies trading
Buy crypto in minutes
What will be the specificities of the DJED?
In order to receive DJED, Cardano users will need to send ADA to the corresponding smart contract. The price of the DJED will be based on that of the US dollar, which means that 1 DJED = 1 US dollar. On the contrary, to resell DJED for ADA, users will have to exchange their DJED for ADA.
According to the documentation provided by COTI, the DJED will also be insured thanks to a second cryptocurrency, the SHEN, which will act as a reserve currency. A choice that aims to ward off possible sudden fluctuations in the price of ADA or to deal with possible massive DJED mints that could cause a lack of ADA tokens in the smart contract.
SHEN holders, who will therefore participate in the DJED price security mechanism, will be rewarded through a liquidity pool system. In order to ensure this mechanism, SHEN holders will not be able to burn their tokens if the collateralization ratio is below the 400% threshold.
On the contrary, if the collateralization ratio exceeds 800%, which is considered as the maximum ratio by the smart contract, the latter will make buying SHEN impossible until the reserve returns to a healthier ratio.
At last, SHEN holders will be rewarded in the form of COTI tokenswhich will result from fees collected during the inherent processes of mint and of burn SHEN and DJED tokens.
👉 In the news – Celsius: a new token would be considered to repay its creditors
Cryptoast launches its 1st collection of NFTs
NFTs associated with a collector paper journal 🔥
Source: Djed
Newsletter 🍞
Receive a summary of crypto news every Monday by email 👌
What you need to know about affiliate links. This page presents assets, products or services relating to investments. Some links in this article are affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no impact on you and you can even get a bonus by using our links.
Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
AMF recommendations. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your ability to lose part of this savings. Do not invest if you are not ready to lose all or part of your capital.
To go further, read our Financial Situation, Media Transparency and Legal Notices pages.
Passionate about the world of decentralized finance and the novelties brought by Web 3.0, I write articles for Cryptoast to help make blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
Maximilien Prue
568 items
