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Cardano to launch new algorithmic stablecoin in 2023

— November 21, 2022 0 comment

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Proof-of-stake blockchain platform, Cardano ( $0.17 ) , has partnered with COTI, a DAG-based Layer 1 protocol, to launch what it refers to as an over-collateralized algorithmic stablecoin. The project said in an announcement provided to Cointelegraph that the stablecoin will be backed by excess collateral in the form of cryptocurrency stored in a reserve.

According to the release, Djed is set to go live on the mainnet in Jan. 2023, pending a successful audit and a series of rigorous stress testing. According to the developers, Djed will be pegged to the US Dollar, backed by Cardano ( $0.17 ) ($ADA), and will use $SHEN as its reserve coin. 

The algorithmic stablecoin will be integrated with selected partners and Decentralized Exchanges (DEXs), who will reward users for providing liquidity using Djed. In a bid to grow at a sustainably healthy pace, the developers plan to adopt a gradual and slow approach to providing $ADA liquidity to the Djed smart contract. 

Shahaf Bar-Geffen, the CEO of COTI shared at the official announcement at the Cardano ( $0.17 ) Summit:

“Recent market events have proven again that we need a safe haven from volatility, and Djed will serve as this safe haven in the Cardano ( $0.17 ) network. Not only do we need a stablecoin, but we need one that is decentralized, and has on chain proof of reserves.” 

Related: Cardano ( $0.17 ) price chart paints ‘Burj Khalifa’ with 7-month losing streak — More losses ahead?

Despite Cardano ( $0.17 ) ’s lackluster price action, the blockchain continues to build and innovate within the ecosystem. On Sept. 22, Cardano ( $0.17 ) ’s long-awaited Vasil upgrade finally went live. The hard fork was designed to help improve the ecosystem’s scalability and general transaction throughput capacity, as well as advance Cardano ( $0.17 ) ’s decentralized applications (DApps) development capacity. At the time of publication, Cardano ( $0.17 ) was trading at $0.30.