Cardano, blockchain payment firm Coti to launch algorithm stablecoin Djed in Jan 2023

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Proof-of-stake blockchain plat­form Car­dano and blockchain pay­ment plat­form Coti will launch an algo­rith­mic sta­ble­coin Djed in Jan­u­ary 2023, accord­ing to a Mon­day press release.

See relat­ed arti­cle: SBF: FTX sta­ble­coin, ‘Sec­ond Great Sta­ble­coin War’ are coming

Fast facts

  • The algo­rith­mic sta­ble­coin is under­go­ing audit and stress tests, said the press release.
  • Djed, backed by two tokens – Cal­dano (ADA) and SHEN, will launch across 40 part­ners and decen­tral­ized exchanges.
  • If Cal­dano expe­ri­ences sig­nif­i­cant down­side volatil­i­ty, the mod­el could col­lapse, result­ing in Djed no longer hav­ing full back­ing. There­fore, SHEN will cov­er Caldano’s price fluc­tu­a­tions and ensure price sta­bil­i­ty, accord­ing to an explana­to­ry video.
  • Ter­ra had sought to design an algo­rith­mic sta­ble­coin with­out cen­tral­ized issuers. But the col­lapse of LUNA and its reserve coin UST in May has made the indus­try and reg­u­la­tors wary of sim­i­lar models.
  • The three largest sta­ble­coins by mar­ket cap­i­tal­iza­tion – USDT, USDC, and BUSD – are all backed by cash and U.S. Trea­sury bills, accord­ing to their reports.

See relat­ed arti­cle: Sta­ble­coin, CBDC take cen­ter stage at Singapore’s Future of Finance Forum

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