A few hours ago, software development company COTI announced the release of the first stablecoin designed to run on Cardano.
The news was first revealed by Charles Hoskinson, leader of Cardano, and Shehav Bar Geffen, CEO of COTI Group, at the Cardano Summit stage in Laramie, Wyoming.
The release of Djed Stablecoin on Cardano will boost the growth of its nascent ecosystem, especially now that blockchain has begun to support smart contracts and markets have strong expectations about the potential development of DeFi platforms on the blockchain that has been touted as the future of Ethereum Killer.
What is a grandfather and why does Cardano need a stable currency?
A stablecoin is a cryptocurrency designed to maintain a fixed value with respect to a reference. The most popular stablecoins are cryptocurrencies such as USDT or Stasis, which are pegged to fiat currencies such as the dollar or the euro. However, there are cryptocurrencies that have a 1:1 value associated with other commodities such as gold (such as Digix) or even other cryptocurrencies or baskets of cryptocurrencies.
There are several ways to achieve this relationship, some of which are more effective than others. The most common is holding or blocking an amount of a reference asset that supports the issuance of a relative amount of the messaging stablecoin: for example, the market capitalization of USDC is $3,677,063,935 due to the presence of $3,677,063,935 tokens The US Circuit holds $3,677,063,935 in warranties.
In the case of Djed, the stability of value is maintained by an algorithm design, which leverages smart contract design on the Cardano blockchain to keep the price as close as possible to $1. To achieve this, Jed maintains a reserve of base currencies while mining and burning other fixed assets and reserve currencies to counteract fluctuations.
According to its white paper, there will be two versions of Djed: a simple version, designed primarily to act as a medium of exchange, and an extended version whose smart contract uses a continuous pricing model and dynamic fees to interact faster with external events, ensuring an optimal level of reserves and providing more security when making Complex operations such as those performed in DeFi protocol transactions.
Shahav Bar-Geffen, CEO of COTI Group, said at the conference that using a stablecoin like Djed would allow users to maintain greater control over their transactions, thanks to its stable value and lower fees.
Blockchain participants use stablecoins to engage in everyday transactions as they allow the exchange of monetary value in a seamless manner, regardless of the location of the sender and recipient. I believe that adding Djed Stablecoin to the Cardano blockchain will greatly improve how transactions are settled on the platform.
For his part, Charles Hoskinson was excited about this new project as it would be one of the most ambitious applications aimed at strengthening the Cardano ecosystem.
The stablecoin could be a game changer in the crypto space, attracting a whole new audience at a time when the industry is already experiencing astronomical growth. COTI has been a longtime partner of the Cardano ecosystem. It’s great to be on board with this new project.
This appears to be a major move for COTI. When its partnership with Cardano was first announced, the COTI token surged 50%, reaching an all-time high (ATH) of $0.60 in just a few hours.
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