Blockchain platform Cardano announces new stablecoin

The Djed will act as an "autonomous bank that buys and sells stablecoins"

Cardano cryptocurrency coins                                 
Cardano cryptocurrency coin – Photo: Shutterstock

A new stablecoin, Djed, will be arriving on the Cardano blockchain and will act as a tool for decentralised finance (DeFi) and help avoid transaction fees.

This was announced over the weekend at the Cardano Summit stage in Laramie, Wyoming US by Charles Hoskinson, founder of Cardano, and Shahaf Bar-Geffen, CEO of the COTI Group, a software development company.

The company behind Cardano, Input Output Hong Kong (IOHK) said that Djed is “based on an algorithmic design that uses smart contracts to ensure price stability”. It will also be used to ensure stablecoins work effectively for DeFi transactions.

A major benefit of the new stablecoin, according to IOHK is that it will make “transaction costs more predictable, so avoiding volatile and exorbitant gas fees for users”.

The COTI development team believes that stablecoins are a ‘killer app’ that will be adopted by a large number of crypto enthusiasts for “settling payments and covering fees”.

Djed will act as an autonomous bank

According to a research paper released back in August regarding the Djed, the stablecoin will behave like an “autonomous bank that buys and sells stablecoins for a price in a range that is pegged to a target price”.

The Djed will operate by sustaining a reserve of base coins while minting and burning various other stable assets and reserve coins.  

The Djed stablecoin could be a game-changer

Charles Hoskinson, the founder of Cardano said: “The Djed stablecoin could be a game-changer in the crypto space, appealing to an entirely new audience at a time when the industry is already experiencing astronomical growth. Djed shares our commitment to formal verification, proving a robust method of combating price volatility of crypto markets.

“COTI has been a long-time partner of the Cardano ecosystem. It’s great to have them on board with this new venture.”

Shahaf Bar-Geffen, CEO of COTI Group, said: “The stablecoin ecosystem has matured tremendously over the past few years. Blockchain participants are using stablecoins to engage in everyday transactions because they allow monetary value to be exchanged in a seamless manner, regardless of the sender and recipient’s location.

“I believe that adding the Djed stablecoin to the Cardano blockchain will significantly improve how transactions are settled on the platform.”

Further reading: Cardano founder predicts other nations will copy El Salvador

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