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Algorithmic Stablecoin (DJED) to be launched for cardano in 2023

The new algorithmic stable coin for Cardano ecosystem called DJED is said to be launched in January 2023. The new system will be using ADA and SHEN which are the smart contract’s reserve tokens and it will be limited to only crypto.

Algorithmic Stablecoin (DJED) to be launched for cardano in 2023
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The coin, called DJED ($DJED), is being created in collaboration with the Layer 1 "Directed Acyclic Graph" (DAG) protocol COTI. It will be linked to the US Dollar, supported by Cardano ($ADA), and utilize $SHEN as its collateralized reserve coin. 

The aim of the new project is to create a price-stable asset backed by ADA. Another reason behind the project is to regain the security and proof-of-reserve constraints of cryptocurrency that were starkly tarnished by the most recent FTX scandal.

In this case, Shahaf Bar-Geffen, the CEO of COTI, during an announcement  at the SwissTech Convention Centre in Lausanne, Switzerland has 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.”

ADA’s price volatilities and fluctuations can cause circulating DJED tokens to no longer be fully backed. For the same reason DJED is created in order to serve as an obstacle against the price volatilities for the Cardano network. 

Other organizations like Terra have also attempted to design algorithmic stablecoins but have failed to do so with UST and LUNA tokens both collapsing to zero in May. 

See also: buy and sell ADA

How Djed performs is yet to be seen, but it can also have a significant influence on the price of ADA. Many will have their eyes on the project, and the audits and test reports that they might publish and the effects it might bring about for the Cardano ecosystem. 

 





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