Cardano Will Have Its First Stablecoin Soon-Djed To Bring Cheap Transactions

Cardano will have its first stablecoin soon dubbed Djed and it will give space for cheaper transactions and will make it easier to run all DeFi projects so let’s read more in our latest Cardano ADA news.

Software development company COTI Announced that the issuance of their first stabelcoin is designed to run on Cardano and the news was also revealed by Charles Hoskison as well as Shahaf Bar-Geffen as the CEO of COTI group, during the Cardano summit in Wyoming. The Djed stablecoin will be issued on Cardano and will promote the growth of the growing ecosystem especially since blockchains are starting to support smart contracts and markets have really high expectations about the possible development of DeFi platforms on the blockchain that has been seen as the future Ethereum killer.

Visual representation of how Djed’s algorithmic design will work on Cardano. Source IOHK

A stablecoin is a cryptocurrency designed to maintain a stable value with respect to a reference and all of the best-known ones like USDT or Stasis are pegged to fiat currencies like the EUR or dollar. However, there are cryptos whose value is pegged 1:1 to other commodities or to other cryptocurrneices. These are a few methods to achieve this relationship and the most popular is the holding of the blocking of the amount of reference asset which supports the issuance of the amount of correspondant stablecoin.

Now, Cardano will have its first stablecoin on the network and with Djed, the value is kept stable by an algorithmic design that leverages smart contract designs on the blockchain to keep the price as closes to $1 as possible. To achieve this, Djed maintains a reserve of base coins while burning and mining other assets and reserve coins to counter the fluctuations. As per the whitepaper, there will be two versions of Djed, minimal one that will serve as a medium of exchange and an extended one whose smart contract uses a sophisticated price model and dynamic fees to react faster to these external events and bring an optimal level of reserves to provide even more security when performing complex operations.

Shahaf Bar-Geffen who is the CEO of COTI Group said that the use of stabelcoins like Djed will allow users to maintain greater control over their transactions due to their stable value and low fees. The blockchain participants are using stablecoins to engage in daily transactions because they allow monetary value to be exchanged simply, regardless of the sender and the recipient’s location. Adding Djed to Cardano will only improve how transactions are settled on the platform.

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