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Cardano-Based DJED Stablecoin Falls Below $1, Here's Why

Fri, 02/03/2023 - 12:14
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Arman Shirinyan
Price fluctuations of newly released stablecoin are raising some concerns, even among Cardano investors
Cardano-Based DJED Stablecoin Falls Below $1, Here's Why
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Things have not gone exactly according to plan as the recently launched DJED stablecoin on Cardano has already lost its peg to the $1 benchmark, raising concerns among investors. However, there is no need to panic or spread FUD, according to some notable community members.

The sudden drop in price has caused a stir in the crypto community, with some speculating that the stablecoin may have a critical issue. But it is important to remember that these types of fluctuations are not uncommon in the crypto market. The main reason behind the drop in price could be a lack of liquidity, which is a common problem for new assets.

DJED stablecoin
Source: CoinMarketCap

The DJED stablecoin operates on a collateral mechanism, which means it is backed by a reserve of assets. The collateral mechanism is designed to stabilize the price of DJED and maintain its $1 peg. But it takes time for this mechanism to work effectively, and the current dip in price is a normal part of the process.

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Investors should not panic and see this as a sign of a larger problem with DJED. Small fluctuations in price are to be expected for any new asset, especially in the early stages of its life. Over time, as the collateral mechanism stabilizes, the price of DJED should return to its $1 peg.

The launch of DJED has been met with some challenges, but these are not unusual on markets. The price dip should be seen as a normal part of the process, and investors should remain patient as the stablecoin takes time to stabilize the price. DJED is mostly repeating the price performance of other notable stablecoins like USDC, USDT and others.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.