Blockchain-based proof-of-stake platform, Cardano, has partnered with COTI, a Layer 1 protocol based on DAG, in order to launch an algorithmic stablecoin that is over-collateralized. In an announcement released to Cointelegraph, the project said that excess collateral will be offered as cryptocurrency reserves.
In accordance with the release, Djed is scheduled to launch on the main network in January 2023, once it has passed an audit and undergoes rigorous stress testing. As stated by the developers, Djed will be tied to the USD, supported by Cardano ($ADA), and its reserve coin will be $SHEN.
It will be integrated with a variety of partners and decentralized exchanges (DEXs), and users will be rewarded for providing liquidity through Djed. To maintain a sustainable and healthy growth rate, the developers will implement slow and gradual processes for the Djed smart contract to obtain liquidity in $ADA.
Shahaf Bar-Geffen, COTI’s CEO, said at the Cardano Summit:
“The recent market events have provided yet another reminder that we need to protect our assets from volatility, and Djed will provide us with this safety. It’s not enough to have a stablecoin, it must also be decentralized, and have on-chain verifiable reserves.”
Although Cardano currently has a lackluster price, its ecosystem continues to grow and innovate. Cardano’s long-awaited Vasil upgrade went live on Sept. 22. As a result of the hard fork, the ecosystem will have improved scalability and transaction throughput capacity, enabling Cardano to develop decentralized applications (DApps). Coin market cap of Cardano was $0.30 at the time of publication.