Cardano (ADA), one of the largest cryptocurrencies and networks in the crypto market, has seen the Djed stablecoin go live on its mainnet. Djed is an algorithmic stablecoin that allows users to find a stable digital currency to interact with different protocols built on top of Cardano. Rather than relying on volatile digital currencies, it is possible for users to use this new stablecoin.
Djed Stablecoin Goes Live on Cardano
A new algorithmic stablecoin called Djed has been released on top of Cardano and it is now operating on its mainnet. This represents a unique opportunity for crypto users to rely on a digital currency that keeps its value stable using an algorithm.
Stablecoins are very useful, especially for users that need to have a stable virtual currency to engage with multiple protocols. In this case, Djed is an algorithmic stablecoin that was created by the COTI team alongside Input Output Global.
Djed is LIVE!!!https://t.co/a9CWJtT4z4
Visit https://t.co/p7eV0jd400$DJED $SHEN $COTI @InputOutputHK @Cardano@Cardano_CF pic.twitter.com/9W7au8imrr
— COTI (@COTInetwork) January 31, 2023
Compared to traditional stablecoins, Djed is algorithmically backed. The digital currency is currently overcollateralized with ADA and Shen. That means that in case there is large volatility in the market and people start to sell Djed, it would be easier for the coin to keep its value at the peg or very close to it.
However, we should not forget that algorithmic stablecoins such as Terra USD (UST) (running on the Terra ecosystem) have received large negative attacks. Why? Simply because it might be necessary for more time for these digital currencies to show that they are strong and resilient enough to speculative attacks. In this case, Djed is using an over-collateralization approach that would make this stablecoin more resilient to external attacks.
Stablecoins such as Tether (USDT) or USD Coin (USDC) rely on fiat reserves backed by cash and cash equivalents. If there is a large number of individuals and companies redeeming their stablecoins, Tether and Circle would be able to give users fiat currencies.
At the moment, there is no information on which are going to be exchanges listing this virtual currency. However, let’s not forget that it might take some time for centralized exchanges to add this coin to the list of stablecoins that they offer to users. It might be easier to get access to this virtual currency using decentralized exchanges (dexes) or other platforms.
According to data shared by CoinGecko, Cardano is the 8th largest cryptocurrency in the world in terms of market capitalization. Cardano’s market capitalization has surpassed $13.6 billion and it could continue to grow in the future as new projects are announced and get released to the market. ADA’s price is registering gains (3.3% in the last 7 days).
It will be a matter of time before we see real adoption push Djed to higher positions in CoinGecko or cryptocurrency market aggregators. Moreover, it will need time for it to establish itself as a viable and reliable stablecoin to use not only on top of Cardano but perhaps also in other networks or protocols.
When it comes to Bitcoin (BTC), the largest cryptocurrency in the market is being traded at $23,133 and it has a market capitalization of $445 billion. This virtual currency experienced a very positive move higher in recent months, allowing BTC to move far away from the bear trend that affected it throughout 2022.