• Cardano and COTI are partnering to develop DJED, a new age stablecoin that will be deployed on the mainnet for investors.
• DJED uses overcollateralization as a technique of providing stability to its currency.
• Overcollateralization of DJED stands at 400-800%, which is higher than other fiat currencies used in stablecoins.
DJED – A New-Age Stablecoin
Cardano and COTI have been collaborating for the past year towards the development of DJED, an innovative stablecoin. Once the mainnet syncing is complete (a 14-day process), it would be available to investors to purchase using ADA or SHEN tokens.
The Volatility Problem In The Crypto Space
Stablecoins seek to solve the volatility issue plaguing crypto ever since its inception by pegging an asset to an inherently stable one like USD. Terra Luna crash caused many investors to steer clear off these assets as it was pegged to Luna, making USDT unstable just like LUNA.
How Does DJED Work?
DJED utilizes overcollateralization as a technique of providing stability to its currency. It has an over-collateralization ratio of 400-800%. This means that for every DJED, the team will have collateralized assets worth more than what is needed for stabilizing it from market volatility.
Cardano’s Recovery After The FTX Crash
Cardano has shown immense recovery after FTX crash pushed ADA below $0.30 mark, demonstrating its dedication towards promoting innovative projects such as this one.
DJED could be one of the most innovative and secure stablecoins in the market if all goes according to plan with its launch on 1st February 2023 on Cardano’s mainnet.