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One day after the official launch, Djed stablecoin, a Cardano-based overcollateralized stable asset, attracted over 27 million in ADA base reserves on Wednesday. Developed by IOG and powered by COTI, the Djed stablecoin is backed by ADA and SHEN tokens as reserve coins. As such, Djed users can rest assured the stablecoin cannot de-peg from the programmed price as observed with Terra Luna UST.
Notably, the Djed stablecoins have a total value locked (TVL) on the Cardano network of about $10.39 million.
The Cardano-based algorithmic stablecoin will have to convince both regulators and traders that its infrastructure is not similar to Terra Luna which led to over $30 billion being wiped out of the market. In a bid to ensure trust with users, the Djed stablecoin has a collateral ratio in the range of 400-800 percent.
Technically, for every Djed minted, the system ensures that there is more than 4 times the value of ADA in the reserve pool.
In order to ensure a healthy market, COTI has noted that SHEN tokens cannot be minted anymore and traders can only access them through DEXs.
…and it’s gone! You can’t mint $SHEN anymore as we’re at 800% over collateral for $Djed. Those who hold $SHEN will benefit from fees, delegation rewards, LP and farming rewards. The only way to get $SHEN now is on DEXs. $COTI @COTInetwork @Cardano @IOHK_Charles @Cardano_CF pic.twitter.com/Ha2NJYr6PN
— Shahaf Bar-Geffen (@shahafbg) January 31, 2023
Future Outlook of Djed Stablecoin on Cardano Network
The Cardano network has provided the crypto market with a decentralized stablecoin after the implosion of Terra Luna last year. As such, ADA price has gained approximately 2.2 percent today to traders around $0.381992.
“Not only do we need a stablecoin, but we need one that is decentralized, and has on-chain proof of reserves,” Shahaf Bar-Geffen, the CEO of Coti noted.
Meanwhile, the Djed stablecoins may not be available to the United States market as regulators seek to interject future developments of decentralized stablecoins. Moreover, the existing stablecoins Circle’s USDC and Tether’s USDT are heavily regulated and audited by government agencies.