DJED attracts more than $10 million in backing

The new stablecoin features an over-collateralized mechanism to maintain its stability and offer rewards to Cardano ADA holders

DeFi February 1
Kimberly Rodriguez Medina

The highly anticipated stablecoin Djed has generated tremendous interest in the cryptocurrency market, with more than 27 million Cardano (ADA) tokens used as collateral at its launch. With a reserve ratio of almost 600%, each Djed is backed six times over its value in ADA.

Djed is the result of a collaboration between IOG and Coti. The stablecoin is backed by other tokens and requires between 400% and 800% in collateral value before being issued to a user. This allows the value of Djed to hold steady during times of market stress, avoiding a repetition of the infamous TerraUSD stablecoin collapse and, for now, it looks like it has succeeded.

Additionally, the Shen reserve token will receive additional rewards when Cardano ADA holders stake their coins to mint Djed stablecoins, which would increase liquidity in the ecosystem. The demand for Shen may also increase due to the integration of Djed with more Cardano-based applications, increasing its utility.

Cardano introduces its first stablecoin, Djed

The Cardano platform was preparing to launch its first stablecoin, Djed, in collaboration with Input Output and Coti, as we recently announced. The arrival of a stablecoin in the Cardano ecosystem is a milestone for the ecosystem since there are currently no stablecoins compatible with the platform.

Djed has been designed with additional measures to guarantee its stability and prevent a collapse like the one suffered by TerraLuna in May 2022, as announced by its developers. The stablecoin will be backed and overcollateralized at a ratio of 4x to 8x, allowing it to maintain its value even during periods of high market volatility.

Now, following the arrival of Djed, Cardano marks an important milestone in its evolution, offering a secure and stable solution for use in DeFi applications. The ecosystem has successfully passed the launch of the stablecoin, also announcing the arrival of a toolkit to facilitate development. What will be the next step for Cardano on its path to success?

To summarize, the Djed stablecoin may attract investor attention and interest due to its over-collateralized mechanism and annualized performance rewards offered by DEXs. Some Cardano DeFi projects, such as Fluid and MuesliSwap, have already integrated Djed as liquidity against loans. Djed tokens are expected to attract high liquidity and interest in Cardano's $91 million DeFi market.