Cardano’s (ADA) Charles Hoskinson Introduces Novel Algorithmic Stablecoin: Details

According to the latest Twitter post by Mr. Hoskinson, his team at IOG is ready to unveil a groundbreaking stablecoin design for the entire DeFi segment.

Introducing Djed

Mr. Hoskinson has taken to Twitter to share four screenshots of a pre-print of an article that describes “formally verified crypto-backed pegged algorithmic stablecoin.”

Been Busy. pic.twitter.com/mmYGoBAsPO

— Charles Hoskinson (@IOHK_Charles) July 15, 2021

The new protocol, dubbed Djed, acts like an “autonomous bank.” This means that pegging to basic fiat currency by buying and selling underlying assets (stablecoins) is ensured.

At the same time, the share of cryptocurrency is stored in reserve to hedge against market volatility. The bank also trades reserve currency in order to capitalize itself.

As a result of this programmed activity, a reserve ration is greater than one in every moment of the protocol’s lifespan.

What’s new in Djed protocol?

The authors of the paper stressed that this concept is novel as the stability claims of their protocol are precisely and mathematically stated and proven.

Besides that, the claims and their proofs are verified by two different techniques, namely bounded model checking and interactive theorem proving.

While Hoskinson’s Twitter followers asked about the value of the new invention, he assured them that the product is ready:

 Algo stablecoin done.

As covered by U.Today previously, Cardano (ADA) is inching closer to its much-anticipated smart contract release.

The Alonzo testnet has successfully entered the AlonzoWhite phase with a notably higher number of testers and new features added.