ADA-backed algorithmic stablecoin Djed launched on Cardano

Published at: Jan. 31, 2023

Since the fall of the Terra (LUNA) algorithmic-stablecoin in mid-2022, many users in the crypto space have developed a weariness towards that particular asset class. The market for algorithmic stablecoins has dropped 10 times what it was at its all-time high prior to the Terra incident.

However, this has not stopped developers on the Cardano network pushed forward with the launch of the ecosystem’s overcollateralized stablecoin. Djed (DJED) launched on the Cardano mainnet on Jan 31. and is pegged to USD and backed by Cardano’s native coin ADA (ADA). It uses the SHEN token as its reserve coin.

According to the announcement the new token recently completed a successful security audit and was under development for over a year. DJED is a product of Coti, a decentralized financial (DeFi) solutions developer on the Cardano blockchain, as a means for new DeFi and payment opportunities.

Cointelegraph reached out to the developers for further comments on the launch. 

Prior to the launch of the new Cardano stablecoin, the idea of bringing another algorithmic stablecoin into existence caused tremors among the online crypto community.

Related: Buterin: How to create algo stablecoins that don’t turn into Ponzis or collapse

This is one of the latest in a series of recent updates coming out of the Cardano network, which included an announcement from co-founder Charles Hoskinson on Jan.12 that the ecosystem will expand via custom-built sidechains.

On Jan. 23, due to an anomaly, 50% of Cardano nodes disconnected and had to restart, which caused a network outage. This was only one week prior to the launch of the new algo stablecoin.

At the beginning of 2023, Bloomberg reported that the risk assessment firm Moody's Corporation is developing a scoring system for stablecoins, which will include an initial analysis for up to 20 digital assets.

Tags
Related Posts
Cardano to enable new DeFi stablecoin with Coti
A new stablecoin is arriving on the Cardano blockchain to provide a tool for decentralized finance (DeFi) operations and avoid transaction fees. Cardano’s payment gateway provider, Coti, will be the official issuer of Djed, a new DeFi-focused stablecoin for the Cardano network, Cardano founder Charles Hoskinson and Coti CEO Shahaf Bar-Geffen announced Sunday at the Cardano Summit. The new stablecoin will be based on an algorithmic design using smart contracts to ensure price stability and providing an instrument for DeFi transactions. The stablecoin is designed for paying transaction fees on the Cardano network in order to avoid “volatile and exorbitant …
Decentralization / Sept. 27, 2021
Cardano stablecoin protocol Ardana raises $10M in latest funding round
Ardana, a stablecoin ecosystem built on the Cardano (ADA) blockchain, received $10 million in seed capital from a group of investors led by Three Arrows Capital and Ascensive Assets. Ryan Matovu, CEO and co-founder of Ardana, issued the following statement regarding the deal: “As the first all-in-one stablecoin ecosystem built on Cardano, our platform provides users with convenient access to liquidity, an ever-present concern in the hyper-competitive defi world. We are also able to leverage Cardano’s speed, scalability and security to offer a decentralized financial solution that works for everyone, and soon we’ll even be facilitating foreign exchange on-chain." Users …
Adoption / Oct. 29, 2021
From DeFi year to decade: Is mass adoption here? Experts Answer, Part 2
Yat Siu of Animoca Brands Yat is the executive chairman and co-founder of Animoca Brands, which delivers digital property rights to the world’s gamers and internet users, thereby creating a new asset class, play-to-earn economies and a more equitable digital framework contributing to the building of the open Metaverse. “2021 was the year of NFTs, and in the second half of the year, we saw a growing emphasis on GameFi. This trend will continue well into 2022. Real mass adoption of DeFi will happen via GameFi, which will explode in growth during 2022 as the potential for mass financial inclusion …
Decentralization / Dec. 22, 2021
How one startup connects a $130 trillion market with decentralized technologies
The overall size of the global bond markets is $130 trillion, while the total market capitalization of the crypto market has surpassed the $2 trillion mark this year and keeps growing. Businesses are always looking for easily accessible financing opportunities. Traditionally, large and mid-sized companies get funding through bank and bond financing. With its global reach and intermediary-free environment, the crypto market, decentralized finance (DeFi) in particular, could become a new source of funding in the near future. However, in its current state, the DeFi lending market is not suitable for established businesses. Most protocols that lend crypto use it …
Blockchain / Dec. 29, 2021
Anchor protocol's reserves head toward depletion due to lack of borrowing demand
Anchor, the flagship savings protocol of the Terra Luna (LUNA) ecosystem, has seen its reserves decline by 35.7% in the past seven days according to Terra.Engineer. Since the beginning of December, the amount of Terra USD Stablecoin (UST) held in the "terra1tmnqgvg567ypvsvk6rwsga3srp7e3lg6u0elp8" smart contract has declined by over 50%, with only $35.7 million remaining. As a savings protocol, users deposit their UST assets via their wallets and earn up to 20% yields as their principal is lent out to borrowers, who pay interest on the loan amount. Borrowers must deposit collateral to ensure the lender can get their money back …
Adoption / Jan. 27, 2022