Cardano is set to launch algorithmic stablecoin Djed in January

Cardano (ADA) developer Input Output made meanwhile over a year ago announced during the Cardano Summit 2021 that COTI will be the official publisher of the new Cardano stablecoin called Djed. Yesterday. During the last day of the Cardano Summit, the CEO of stablecoin development company COTI announced that Cardano’s new algorithmic stablecoin will be launched in January 2023.

COTI CEO Shaaf Bar-Geffen said the following about the new stablecoin:

”Djed to the public mainnet is a great achievement, after a lot of hard work by IOG and COTI. Recent market events have again proven that we need a safe haven from volatility, and Djed will serve as this safe haven in the Cardano network.”

What is Djed?

As mentioned, Djed is an algorithmic stablecoin that will be pegged to the US dollar and will exist on Cardano’s network. This stablecoin has been in development for over a year and will be backed with crypto assets instead of fiat money. Cardano users will be able to use ADA as collateral for it mint from Djed. Then when you send ADA to a particular smart contract on Cardano, you get the same dollar value in Djed in return. Conversely, if you send 1 Djed back to the smart contract you will get $1 worth of ADA.

The stablecoin is designed so that it overcollaterized is, meaning it is backed by excess collateral in the form of a cryptocurrency held in a reserve. Also referred to as SHEN, this cryptocurrency will cover ADA price fluctuations to ensure price stability with a collateral rate of 400-800%.

Djed will be integrated into 40 dApps in the Cardano ecosystem at launch. The launch will also see the introduction of DjedPay, a service that allows merchants to accept Djed payments.

USDA stablecoin

Last week you could also read in the Cardano news that the network is going to launch its first stablecoin called USDA. USDA is a stablecoin released by Emurgo, the development platform and commercial arm of Cardano, and is fully backed by the US dollar. USDA will launch on the network in the first quarter of 2023.