With the help of the DAG-based Layer 1 protocol COTI, the proof-of-stake blockchain platform Cardano has launched an “over-collateralized algorithmic stablecoin.” The project has announced that the stablecoin would have additional cryptocurrency collateral held in a reserve.
Djed is expected to launch on the mainnet in January 2023, pending the results of an assessment and a series of stringent stress testing. Djed’s creators claim their cryptocurrency would be connected to the US dollar, supported by Cardano ($ADA), and backed by $SHEN as its reserve token.
By providing liquidity on select DEXs, users of the algorithmic stablecoin Djed will be benefited. The creators of the Djed smart contract want to gradually increase the $ADA liquidity in it to promote healthy, long-term growth.
CEO of COTI Shahaf Bar-Geffen made the formal announcement during the Cardano Summit, and he said:
“Recent market events have proven again that we need a safe haven from volatility, and Djed will serve as this safe haven in the Cardano network. Not only do we need a stablecoin, but we need one that is decentralized, and has on-chain proof of reserves.”
There hasn’t been much change in the price of Cardano, but the blockchain itself is expanding and introducing different theories into the ecosystem. On September 22nd, the highly anticipated Vasil update for Cardano was released to the public. Cardano will be able to create more decentralized apps and better support a larger user base, and the ecosystem as a whole will be able to scale to accommodate more users and transactions (DApps). At the time of writing, one Cardano was worth around $0.30.