Cardano has entered into a partnership with COTI, a Level-1 protocol based on DAG, to launch an algorithmic stablecoin, which will be secured by over-collateralization of its reserves.
Djed, as it will be called, is set to go live on its mainnet in January 2023, pending a successful audit and a series of rigorous stress tests. According to the developers, Djed will be pegged to the US dollar, backed by Cardano ($ADA) and will use $SHEN as its reserve coin.
Where it will be integrated
The algorithmic stablecoin will be embedded in selected partners and decentralized exchanges (DEX), which will reward users for providing liquidity using Djed.
In an effort to grow at a sustainable healthy pace, the developers plan to take a gradual and slow approach to providing $ADA liquidity to the Djed smart contract.
Safe haven
Shahaf Bar-Geffen, the CEO of COTI, pointed out in the official announcement at the Cardano Summit:
“Recent market events have proven again that we need a safe haven from volatility and Djed will serve as that safe haven in the Cardano network. Not only do we need a stablecoin, but we need one that is decentralized and has evidence of its reserves.”
Cardano continues to “build”
Cardano continues to build and innovate. As a reminder, the Vasil upgrade was successfully released on September 22, with the goal of helping to improve the scalability of the ecosystem and overall transaction processing capability, as well as promoting the ability to develop decentralized applications (DApps).
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