Fintech startup COTI the issuer of the algorithmic stablecoin Djed ($DJED), has recently announced that the Cardano-powered algorithmic stablecoin is set to be listed on the network’s largest decentralized exchange (DEX) MuesliSwap.
COTI retweeted an announcement from the team behind MuesliSwap, which revealed it will e listed both $DJED and $SHEN, a reserve token meant to support Djed’s stability, which will see its holders receive extra rewards when Cardano holders stake their coins to mint the stablecoin.
The listing is set to be made next week, presumably right after the algorithmic stablecoin is launched. Djed is a formally verified algorithmic stablecoin for Cardano that is backed by cryptocurrency, IOG, the company behind the development of Cardano, designed the stablecoin, while COTI Group is responsible for issuing it.
Djed’s use of smart contracts ensures price stabilization. Djed can be useful in decentralized finance (DeFi). It works by “keeping a reserve of base coins, and minting and burning stablecoins and reserve coins.”
The stablecoin, according to its documentation, acts as an autonomous bank that “buys and sells stablecoins for a price in a range that is pegged to a target price,” and is crypto-backed “in the sense that the bank keeps a volatile cryptocurrency in its reserve.”
The reserve is then used to buy stablecoin from users that want to sell them, and the revenue from stablecoin sales is stored in the reserve. To avoid a collapse similar to the one of the Terra protocol last year, Djed has an overcollateralization mechanism, meaning users have to pledge more than 400% in collateral to mint Djed.
As CryptoGlobe reported, popular and respected Cardano influencer “ADA whale” has recently said there is “an insane amount of cool stuff” coming to Cardano and its ecosystem. Some of the projects being built on Cardano include algorithmic stablecoin $DJED, fit-backed stablecoin $USDA, and stablecoin decentralized exchange TeddySwap, among others.
Earlier this month, Cardano’s market cap surpassed that of popular meme-inspired cryptocurrency Dogecoin ($DOGE), at a time in which $ADA has been recovering from its second-largest drawdown ever.
Featured image via Unsplash
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