Stablecoin Djed is expected to drive new growth and new use cases in the growing decentralized finance (DeFi) space of the Cardano ecosystem. In recent weeks, Djed developer, COTI Network, has stated that the stablecoin will definitely be released in January.
In the Cardano community, however, there has been some speculation lately as to how far preparations have progressed for the launch of the stablecoin announced back in November. COTI has now published a new to eliminate speculation Blog post Confirming the launch within the next week. However, a specific date is still pending.
“We are pleased to share another update on Djed’s progress and to inform you that the launch is scheduled for next week,” reads the announcement.
Additionally, COTI announced that cryptocurrency exchange Bitrue will list Djed and SHEN. Djed’s DEX partner Wingriders also hinted on Twitter that an announcement would be made soon.
For Djed’s technical developments, the COTI team has started the process of syncing the chain index.
“This process may take 14 days, and as we started the sync a week ago, we expect to complete it next week and be ready for launch. As of now, this is the only technical hurdle holding up the launch,” says COTI.
In addition, the company is still working on a snapshot mechanism and user interface that will allow tracking of additional rewards for SHEN holders who accumulate and stack ADA in the Djed smart contract.
Will Djed Awaken the Cardano DeFi Ecosystem?
The launch of Djed comes with high expectations because a stablecoin has been missing in the Cardano ecosystem until now. Stablecoins are very important for implementing low-fee strategies, especially in the field of DeFi.
Djed also enters a crypto market where stablecoins have become increasingly important in recent years. Among the top 10 cryptocurrencies by market cap, there are no less than three stablecoins, Tether (USDT), USD Coin (USDC), and Binance USD (BUSD), which are pegged 1:1 to the US dollar and are backed by various forms. of fiat money reserves.
Cardano-based stablecoin, on the other hand, is designed to ensure its price stability through reserves in ADA. Initially, the team referred to it as an algorithmic stablecoin but dropped that term – possibly given eerie memories of Terra Luna and its algorithmic stablecoin UST, which was backed by BTC.
COTI calls Djed an overcollateralized stablecoin, whose coverage in ADA is at least four times that of Djed’s issuance. Thus, the Cardano stablecoin shows some similarities in the ecosystem of Tron (TRX), where the overcollateralized stablecoin USDD is based.
However, the USDD has recently struggled to even defend its peg to the USD. However, USDD enjoys greater popularity. Tron Ecosystem’s stablecoin has a market capitalization of $716 million. Perhaps because of this, Tron’s DeFi ecosystem is much larger ($5.1 billion TVL) than Cardano’s ($73 million TVL), according to DeFiLlama. data.
Can ADA reach $1 after the release of Djed?
If Djed’s concept works, the stablecoin could massively boost Cardano’s DeFi ecosystem. However, Djed must first pass a field test. Apart from the huge potential, Terra also has the same risk of failure as UST. This could seriously damage the Cardano ecosystem and ADA value.
But if Djed succeeds, it could give the ADA a big boost. A look at Cardano’s 1-day chart shows that the price has broken out of an eight-month downtrend and successfully handled the mid-January retest.
Another key price target is the resistance zone around $0.41, which has served as support for a long time. If this resistance falls, $0.75 will be the next target before $1 can be on the cards.
Featured image from AnTa_ranga / Pixabay, chart from TradingView.com