Cardano, one of the world’s leading blockchain networks, is set to expand its portfolio by releasing its algorithmic stablecoin,$Djed. The open-source blockchain network is highly regarded for its scalability, sustainability, interoperability, and security features, making it among the best in the world.
Thus, banking on the success of the network and the need for Cardano-based stablecoins, djed is set to be released later on in 2022. Thus, a thorough introduction to stablecoin and its features will be conducted in this explainer.
All About $Djed
In the race to supply the need for a Cardano-based stablecoin, COTI, a software development company, was first to produce tangible results. This development would see the company launch the algorithmic stablecoin on a touted platform to oust Ethereum. Recently, COTI placed itself ahead in the race to complete a Cardano-based stablecoin by running the first testnet. The coin’s release is set to drive growth in the blockchain’s budding ecosystem.
The release of this coin is set to be impactful amidst speculation that the release may be as close as a few weeks away. However, COTI, IOG, or IOHK have yet to issue a public statement about the coin’s exact date of release.
The blockchain network uses an intuitive design that fixes most of the issues associated with blockchain. Djed is an algorithmic stablecoin that gains its stability by acting as an autonomous bank. Stablecoins are a vital part of the crypto economy as the coins work to hold a “safer” asset tag when compared to other cryptos.
These coins hold less exposure to volatility for users while also allowing them to join the community speedily. By bridging the connection to other fiat currencies or gold, stablecoins are the most seamless transactions for users.
In the system created by the smart contracts, $Djed is directly pegged to another stablecoin $Shen. This feature implies that the coin’s adjustment properties work in a way to adjust the coin’s collateral reserve ratio in the range of 400%-800%. When the range points are reached at both extremes, the contracts are designed to act in specific ways. This aspect of Djed will be able to help resolve current uncertainty issues in the crypto world. Uncertainties about gas fees and stabilized transaction fees can be adjusted and maintained using this coin for payments. This would greatly benefit the Cardano ecosystem and boost its growth.
When the reserve ratio drops below the 400% mark, the system will automatically adjust to prevent the minting of more $Djed tokens. Similar action will also be done to $Shen as users will be unable to burn more tokens. At this low point, only two things are allowed. Users can increase the reserve ratio by burning Djed and exchanging it for ADA. Additionally, when the low point is reached, investors are allowed to intervene to increase the reserve ratio. Hitting the low point allows the investors to mint more Shen to maintain the reserve ratio.
At this point, the system will also step in to adjust the token prices via its smart contracts. By blocking the minting of more Shen, the reserve ratio can be maintained at the intended levels.
Thus, in the case of price shortfalls, Shen is used as a reserve token. The coin is used to guarantee the collateralisation rate. Following the coin’s milestone testnet event earlier in the year, some key issues have been identified. These issues include “unavailable request” and “invalid collateral type”. COTI outlined that identifying such issues is normal and assured users that these issues will be sorted out prior to the release of the coin’s mainnet launch in June.
Where To Buy Djed
This issue has yet to be comprehensively announced by the stakeholders to the public as the stablecoins development continues behind the scenes. Thus, no official communication has been made about compatible wallets. However, since COTI is renowned for developing its own financial solutions, early investors can piggyback on this aspect to investing early. Avenues such as COTI pay can be possible conduits for distributing the stablecoin.
Djed is a stablecoin set to be the first of its kind on the Cardano blockchain network. This network is renowned for its perks and has been previously cited to compete with the likes of Ethereum. Cardano’s need for a network-based financial solution has led to the emergence of Djed.
The stablecoin’s use of reserve ratios to control the coin’s stability and prices remedies major issues facing other coins in the current market. These features prove the coin a worthy contender to compete with the top cryptos in the market. Therefore, investing in the venture may be favourable for individuals and institutions alike.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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