On January 31, layer-one protocol COTI officially introduced DJED, the native stablecoin for the Cardano (ADA) network. The introduction of the Djed stablecoin is anticipated to increase the total value locked (TVL) on the Cardano ecosystem and due to its overcollateralized nature & fee allocation method — it’s claimed to offer greater stability and rewards to holders.
DJED Stablecoin Launch On Cardano
In its official blog post, COTI stated that the ADA-backed stablecoin would become live on the mainnet as soon as the chain index synchronization process was finished. According to COTI, the technical process was initiated one week ago and required approximately 14 days to finish. Furthermore, the report also emphasized the technologies that will be added to the stablecoin with subsequent updates after the initial launch.
Similarly, the ability to cancel an order has been added. The feature will allow users to click on the refund button to cancel their transaction “as long as it has not been processed.
Many consumers in the cryptocurrency market have become weary of dealing with algorithmic stablecoins since the debacle of the TerraUSD (UST) algorithmic stablecoin in May 2022. The market for this sector has experienced a massive decline that is ten times steeper than it was before the Terra collapse.
However, this has not discouraged the developers working on the Cardano network from proceeding with the launch of the stablecoin for the ecosystem on January 31. As per the recent announcement, the team working on DJED has conducted extensive research into the vulnerabilities that are connected with algorithmic stablecoins like UST, FEI, and MIM; and has been working on them to safeguard the cryptocurrency from facing a similar scenario. DJED is backed by Cardano’s original cryptocurrency, ADA, and it is pegged to the value of the United States dollar. The Shen (SHEN) token is what serves as the reserve currency for this platform.
Djed is LIVE!!!https://t.co/a9CWJtT4z4
— COTI (@COTInetwork) January 31, 2023
Growing Usecases For DJED
For starters, Djed will function as a decentralized bank that caters to a variety of different use cases. COTI is now working on the development of Djed Pay, which will allow users to pay merchants with the stablecoin. Alternative banking, lending, and remittance are some other examples of use cases for blockchain technology. Additionally, according to plans that were made public by IOG, Djed is going to evolve into the currency that will be used to pay for all Cardano gas fees later. Instead of having gas prices that are unpredictable, this will make it possible to have consistent and stable transaction costs.
Moreover, COTI also confirmed that Djed will get listed on exchanges at the time of its introduction. Bitrue, a centralized exchange, recently made the announcement that both DJED and SHEN will be listed on the spot markets of the platform upon its launch. In addition, COTI pointed out that Wingriders, which is a partner of Djed’s decentralized exchange (DEX), also suggested about listing the stablecoin. This is one of the most recent updates in a series of recent updates that have come out of the Cardano blockchain. These updates include an announcement made on January 12 by co-founder Charles Hoskinson that the ecosystem will expand via custom-built sidechains.
In the meantime, as a result of this update, the price of Cardano (ADA) has skyrocketed, paralleling the spike seen across the whole crypto market. During the previous twenty-four hours, ADA has seen a price increase of 4.10%, and it is currently trading at about $0.39.