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Cardano, whose native crypto is ADA, made it official a few hours ago: in the coming days there will be the arrival of the new over-collateralized DJED stablecoin, developed by COTI Network.
COTI Network also officially announced the launch of the “over-collateralized” DJED stablecoin, which will take place within the next week. Although there is no official date yet, confirmation of the launch comes via the official blog, which reads:
“We are happy to share another update on DJED’s progress, and let you know that the launch is scheduled for next week.”
Cardano’s (ADA) announcement about the new stablecoin
The new DJED stablecoin project will run on Cardano’s infrastructure. A project that has been talked about extensively before, so much so that it is among the most anticipated by a substantial part of the community revolving around ADA.
As anticipated, the project will be officially launched next week, with support from a few exchanges as well, albeit minor in terms of volume.
Thus, this could be an important step forward for the whole Cardano ecosystem, as the launch of DJED is interesting in many ways.
The project managers, on the official Medium website, wrote the following:
“We have started a chain index syncinc process which takes up to 14 days. Since we started it a week ago, we expect to complete it next week and be ready to launch. At the moment, this is the only technical bottleneck hindering the launch.”
In the same announcement, COTI, the group managing the entire project, also reports the creation of a snapshot mechanism and also an interface that will soon be added to the project website.
Cardano’s new project (ADA): how it will work
As we have mentioned, Cardano’s new stablecoin project will be over-collateralized, as opposed to the others, that is, between 400% and 800% over circulating. This is an arrangement that should avoid problems such as those that occurred with Terra Luna’s UST.
However, this is not the only stablecoin project that will be launched on Cardano. In fact, recently there has also been talk of USDA, another project, this time internal to Cardano, which will see the direct involvement of Emurgo, one of the three entities involved in the technical and commercial development of Cardano.
Furthermore, regarding the exchanges involved, the first to list the stablecoin along with the SHEN token will be Bitrue. SHEN assumes the role of “reserve” in DJED’s mechanism for maintaining the peg.
It doesn’t end there, as Shahaf Bar-Geffen, CEO of COTI Network, told users to get ready for more “exciting” news in the coming days, the result of a process that began in 2021, and which involved collaboration with the Cardano Input Output (IOG) team and a total of forty partnerships for the proper development of the token.
Specifically, the COTI team said it has started the process of “synchronization” of the chain, which is expected to be able to be completed in about a week. In addition, a new snapshot mechanism is in the pipeline that, along with a user interface, will allow users to track the rewards of SHEN holders depositing and accumulating ADA.
The future of the Cardano ecosystem
In conclusion, how important is this news for Cardano? For sure, on the one hand there is the obvious state of excitement about a new project getting off the ground, and on the other hand, following a nightmarish 2022, there are concerns about algorithmic stablecoins, similar to the case of USDD on Tron.
In any case, one can only wait and see how much volume these kinds of projects on Cardano will be able to generate. Regarding the future of the ecosystem, 2023 might be the right year, probably even for ADA.
Indeed, the launch of DJED enjoys high expectations precisely because of the lack, so far, of a stablecoin in the Cardano ecosystem, which are fundamental to implementing new trading strategies in the DeFi world.
After all, stablecoins are now essential tools in more ways than one, and the fact that there are as many as three stablecoins in the top ten cryptocurrencies by capitalization confirms this.
The biggest uncertainty, if any, is the fact that DJED is built to maintain its peg via ADA reserves. Which is a very strong reference to the old TerraUST, which catastrophically failed in May 2022.
In any case. DJED is described by the developers as an “over-collateralized stablecoin,” whose ADA hedge consists of four times the issuance of DJED. The similarities, in this sense, are with the USDD stablecoin, from the Tron ecosystem. That is without considering, of course, the difference between Tron’s TVL ($5.1 billion) and Cardano’s ($73 million).