Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.
Cardano founder Charles Hoskinson has given an indication of the progress made on the Djed stablecoin building on Cardano in a recent tweet. Djed, a decentralized algorithmic stablecoin for Cardano, developed by IOG and issued by COTI, was launched on the public testnet recently. Cardano founder Charles Hoskinson notes this as a major milestone for algorithmic stablecoins.
ProtoDjed is looking good https://t.co/dYO2OcfjWQ pic.twitter.com/rygcNsrTL2
— Charles Hoskinson (@IOHK_Charles) May 11, 2022
The Cardano founder earlier took a swipe at Terra following the UST collapse. Terra's algorithmic stablecoin, UST, suffered a free fall to lows of $0.26 on May 11 after losing its peg. Terra's native asset, LUNA, has also declined nearly 93% as the incident fueled negative sentiment among Terra holders.
Hoskinson had inquired into the progress of SigUSD, an algorithmic stablecoin based on the AgeUSD protocol. The AgeUSD protocol was researched in partnership among the Ergo Foundation, IOHK media and Emurgo, Cardano's commercial arm. In response to updates on SigUSD, the IOHK CEO then stated, "protodjed is looking good."
SigmaUSD has proven the $Djed technology and its stability. This will bring new capital into the #Cardano ecosystem, benefitting every project.
— Indigo | Synthetic Assets (@Indigo_protocol) May 11, 2022
Stablecoins are vital for crypto markets because price stability is integrated into the assets themselves. This opens up various chances for DeFi and value transfer without the fear of price swings. The underlying collateral is how they attain price stability.
Cardano's algorithmic stablecoin is named after Djed, which is the symbol of ''stability'' in ancient Egypt and the symbolic backbone of the god Osiris, the god of the afterlife and resurrection.
Explaining the details on Djed, Cardano developer Sooraj stated: "Djed is the 1st stablecoin protocol for which stability claims are precisely & mathematically stated, proven & formally verified. Djed's governing algorithm behaves like an autonomous Bank that buys and sells stablecoins for a price in a range that is pegged to a target price."
The reserve coin, Shen, is charged with the responsibility of providing extra reserves for the pool. Unlike the Djed stablecoin, Shen is not pegged to a specific asset and its price can fluctuate.
Yuri Molchan
U.Today Editorial Team
Vladislav Sopov
Dan Burgin