Cardano Unlocks Huge Realms After Launch Of Long Anticipated ADA-Backed Stablecoin

The Cardano community is expressing collective excitement following the launch of the highly awaited ADA-backed stablecoin Djed.

Thanks to the collective efforts of the COTI network and Cardano’s developer Output Global, Djed, the overcollateralized stablecoin is now live on the Cardano mainnet.

In a recent blog post by the COTI network following the launch of Djed, COTI explained the relevance of the launch of the stablecoin in the DeFi ecosystem.

“Launching Djed is a significant milestone for COTI, the Cardano ecosystem, and for the DeFi ecosystem as a whole. Being a decentralized open-source protocol, Djed is community-driven, as it brings an opportunity for users to hold, mint, and burn DJED and SHEN.” COTI wrote in its blogpost. 

Djed is pegged to the USD, backed by ADA, and uses SHEN as its reserve coin. Djed also uses over-collateralization and on-chain proof of reserves to safeguard its value in the ever-so-volatile market.

Djed is expected to position Cardano for wider opportunities within the DeFi ecosystem, as it has already secured 40 partnerships designed to accelerate its utilization.

Singapore-based Cryptocurrency exchange Bitrue will be the first exchange to DJED and SHEN. Additionally, Djed is also available on DEX exchange Wingriders, and on two of Cardano’s leading DeFi platforms MuesliSwap and MinSwap.

Although Djed’s reserve ratio is currently between 400% – 800%, COTI explains what will happen if it drops below that point. 

“In a case where the reserve ratio drops below 400%, the platform will prevent the burning of SHEN and the minting of new DJED (since there is not enough collateral in the reserve). In the case that the ratio goes over 800%, users will not be able to mint any more SHEN, however, they will still be able to mint and burn DJED. In any scenario, DJED is always redeemable.” COTI added in the blogpost.

What to expect from Djed in the long term

To provide liquidity, Djed 1.1.1 will provide delegation rewards, including SHEN mint and burn fees for SHEN holders. LP and farming rewards will also be accessible to SHEN holders through Wingriders, Minswap, and MuesliSwap DEXs.

Later in the year, the COTI network plans to introduce Version 1.2 of Djed. The version will enable Vasil features and include a reference script to increase scalability.

Djed 1.3 is also expected to follow later on. It will come with dynamic fees and prices. It will also support a “progressive delegation program” expected to usher in liquidity.