Djed, an algorithm stablecoin on Cardano is now live on mainnet. According to its developer, Coti, the launching of Djed on mainnet emerged through the partnership with Cardano’s core developer Input Output. Coti said the public mainnet launch of the project heralds a new era for stablecoins.
According to the announcement, the unveiling of Djed remains a significant milestone for COTI, the Cardano ecosystem, and for the DeFi ecosystem as a whole. Notably, the project focuses on community advancement, thereby bringing an opportunity for users to hold, mint, and burn Djed and Shen.
Meanwhile, in a bid to ensure its proper utilization and adoption, Coti said it has engaged in over 40 partnerships. Occasioned by this development, Djed is expected to unlock opportunities for the Cardano ecosystem around Defi, Payments and more. It possesses a unique mechanism of overcollateralization by 400%-800% with on-chain PoR to protect its value in different market scenarios.
Side notes about Djed
Worth noting that Djed maintains its price peg based on a collateral ratio between the premise of 400%-800% for Djed and Shen. Also, staggering prices of ADA are often maintained by Shen, thus, setting up shortfalls and aiding the collateralization rate.
However, Shen is the reserve token that helps Djed to maintain its algorithmic peg as a stablecoin. According to the team behind the stablecoin, Shen represents royalty and symmetry. The name intends to establish a connection with infinity, protection, and completeness for the token due to its circulatory system.
More so, the maintenance of Djed’s ADA reserve pool is under the management of network participants that mint Shen. Consequently adding their ADA rewards to the pool. This is against the popular management of reserve pool by market makers. With that, the token gains a decentralized posture as Shen holders get rewards as they provide liquidity through fees.
Additionally, the risk of the stablecoin losing its peg is minimized by its over-collateralized system. The system provides 8x reserve assets more than the Djed in circulation.
Practically, for every 1 Djed minted by network participants, there are about $3 to $8 worth of ADA in the reserve pool. However, a new Djed cannot be produced if the ratio plunges below 400%. In that regard, $Shen holders will not be able to burn their tokens as well.