COTI CEO Shahaf Bar-Geffen has appeared on stage at the annual Cardano Summit in Lausanne, where he confirmed that the company’s algorithmic stablecoin will launch in January after the conclusion of a full audit.
“Djed going to public mainnet is a great achievement, following a lot of hard work from IOG (Input Output Global) and COTI,” said Bar-Geffen. “Recent market events have proven once again that we need a safe haven from volatility, and Djed will fulfil this role in the Cardano network.
“We need a stablecoin that is decentralized and has on-chain proof of reserves: Djed is just that and I see it becoming the top stablecoin on the Cardano network.”
Slow and Steady Approach
COTI’s announcement of a launch date was teased several days ago, and the hype has been steadily building for Djed, an over-collateralized algorithmic stablecoin which will be integrated out of the gate with various COTI partners, not least DEXs, launchpads, wallets and lending protocols. According to Bar-Geffen, further partnerships will also be announced throughout 2023.
The decentralized exchanges integrated with Djed from January, which include AdaSwap, Cardax, SundaeSwap and ADAX, will offer increased rewards to users who supply liquidity using the COTI-powered stablecoin. Djed will include Vasil hard fork compatibility, with future versions expected to introduce dynamic fees and prices and also support staking.
An enterprise-grade layer-1, COTI has taken a slow-and-steady approach to the issuance of Djed, which was first announced at the 2021 Cardano Summit in Wyoming. On the main stage at this year’s event, Bar-Geffen stressed that COTI was keen to ensure several rigorous stress tests had been completed before Djed debuted on the Cardano mainnet, and that $ADA liquidity had gradually been provided to the Djed smart contract in line with this approach.
While other blockchain networks have dominant dollar-pegged stablecoins, most notably USDT (Tether) and USDC (USD Coin) on Ethereum, Cardano has not benefited from such an ecosystem to date. As the only blockchain network to have conducted KYC/AML on all users since launching in 2017, COTI believes it is well placed to issue a stablecoin that is dependable, regulation-ready, and highly secure.
Built on Cardano and powered by COTI, Djed is essentially an algorithmic stablecoin protocol that functions like an autonomous bank, buying and selling stable assets based on a price range set by a target price. Pegged 1:1 with the US dollar, Djed is backed by a base coin ($ADA) and uses $SHEN as a reserve coin.
The algorithmic underpinnings of the asset relies on a collateral ratio within the range of 400-800% for $DJED and $SHEN in order to guarantee that there is sufficient $ADA in the pool.
Cardano founder Charles Hoskinson has long touted Cardano’s potential as a DeFi powerhouse. Last year, he even introduced the Cardano DeFi Alliance (CDA) with the goal of creating a robust and dynamic ecosystem for the next wave of DeFi innovation. With the forthcoming launch of Djed, not to mention another US-pegged stablecoin, USDA, that vision is gradually coming into clearer focus.
In light of recent market turbulence, 2023 is shaping up to be an interesting year for crypto in general – and certainly for Cardano. Not only will the latter’s DeFi ecosystem be battle-tested for the first time, but Hoskinson recently announced the release of a new privacy-centric network, Midnight, underpinned by zero-knowledge-proof technology.
Whatever happens with Midnight, January’s launch of Djed will be a watershed moment for Cardano – and in particular its DeFi ambitions.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice
Source: Crypto News