Conceived by Input Output and developed by fintech COTI, the algorithmic stablecoin DJED should see the light of day on the Cardano (ADA) blockchain next week. DJED will be anchored to the US dollar, and insured by both ADA and SHEN, a token available for staking that will allow you to receive a portion of the fees collected at the mint and the burning processes of the stablecoin.
DJED is coming to Cardano soon
DJED stablecoin will therefore be the first stablecoin developed specifically for the Cardano (ADA) blockchain, Because it should be available next week.
Conceived by Input Output, Cardano’s research firm, and developed by fintech COTI, which specializes in digitizing currencies and creating digital payment solutions, DJED will be an algorithmic stablecoin Which should be maintained as collateral Between 400 and 800%As per available documents.
We are happy to share another update on Djed’s progress and to announce that the launch is scheduled for next week!
— COTI (@COTInetwork) January 24, 2023
“We are happy to share a new update on Djed’s progress and let you know that the launch is scheduled for next week!”
Theoretically it should be very significant over collateral Allow Terraco to avoid similar scenarios (LUNA) that we were able to observe in May 2022, which was the result of simultaneous declines in LUNA and UST, 2 cryptocurrencies closely linked before their collapse.
For simplicity, An algorithmic stablecoin is structured to self-regulate to ensure parity with its reference asset., often US dollars. The algorithm should make it possible to buy stablecoins when the price falls, and vice versa, to sell when the price rises.
Note, however, that this is not Cardano’s “official” stablecoin, as the blockchain is due to issue its own via Emurgo in the first quarter of the year as part of the launch of its Agency product line. USDA baptismIt must be backed entirely by reserves in US dollars, unlike DJED which will be backed by ADA.
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What will be the specialty of DJED?
In order to receive DJED, Cardano users must send ADA to the corresponding smart contract. The price of DJED will be based on US dollars, which means 1 DJED = 1 US Dollar. Conversely, to resell DJED for ADA, users will have to exchange their DJED for ADA.
According to a document provided by COTI, DJED will also be insured for a second cryptocurrency, SHEN, which will act as a reserve currency. A choice aimed at preventing possible sudden fluctuations in the price of ADA or dealing with potentially massive DJED mints that may lack ADA tokens in smart contracts.
SHEN holders, who will participate in the DJED price protection mechanism, Liquidity will be awarded through a pool system. To ensure this mechanism, SHEN holders will not be able to burn their tokens if the collateral ratio is below the 400% threshold.
Conversely, if the collateral ratio exceeds 800%, which is considered the maximum ratio by the smart contract, The latter will make it impossible to buy Shane until the reserves are reduced to healthy proportions..
Finally, SHEN holders will be rewarded in the form of COTI tokenswhich will result fee collected during the underlying processes Mint and who to burn SHEN and DJED tokens.
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