In light of the release of Djed, the long-awaited ADA-backed stablecoin, the Cardano community as a whole is expressing a sense of joy.
The overcollateralized stablecoin has been deployed to the Cardano mainnet thanks to the combined efforts of the COTI network and Output Global, Djed, the developers of Cardano.
The significance of the introduction of the stablecoin Djed to the DeFi ecosystem was recently discussed in a blog post by the COTI network.
“The release of Djed marks a major achievement for COTI, the Cardano community, and the DeFi ecosystem as a whole.
The Djed currency is anchored to the US dollar, supported by the ADA token, and backed by the Shen token (SHEN). To protect its value in the ever-fluctuating market, Djed employs over-collateralization and on-chain proof of reserves.
With 40 collaborations already established to speed up its use, Djed is intended to position Cardano for larger prospects inside the DeFi ecosystem.
Bitrue, a Singaporean cryptocurrency exchange, will be the first such platform to offer DJED and SHEN. Djed can be purchased on the DEX exchange Wingriders, as well as on the top two Cardano DeFi platforms, MuesliSwap and MinSwap.
Even though Djed’s reserve ratio is in a safe range of 400% to 800% right now, the consequences of a drop are spelt out by COTI.
The platform will prohibit SHEN from being burned and fresh DJED from being minted if the reserve ratio falls below 400%. If the ratio rises above 800%, users will be unable to mint new SHEN, but they will be able to continue minting and burning DJED. DJED can always be saved, no matter what happens. COTI was included in the blog post.
Delegation benefits, such as SHEN mint and burn fees, will be distributed to SHEN holders as part of Djed 1.1.1 in order to increase liquidity. Holders of SHEN will be able to trade their tokens for LP and farming rewards on the Wingriders, Minswap, and MuesliSwap decentralized exchanges.
The COTI network is working on releasing Djed 1.2 later this year. The update will provide a reference script to aid with scalability and allow for the use of Vasil features.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.