Cardano founder Charles Hoskinson and Coti CEO Shahaf Bar-Geffen announced Djed, a new stablecoin for Cardano blockchain. At the Cardano Summit in Laramie, Wyoming, on Sunday, the two said that the COTI platform would be the official issuer of Djed.
According to the announcement, Djed is a new DeFi-focused stablecoin for the Cardano network, that will provide a tool for decentralized finance operations and avoid transaction fees.
The new stablecoin is build upon an algorithmic design that makes use of smart contracts to ensure price stability. Also, Smart contract programming ensures that Djed, will work effectively for DeFi transactions.
Djed works by maintaining a stock of base coins, while minting and burning many other stable assets and reserve coins. Designed to be utilized for paying transaction fees on the Cardano network, Djed, also makes transaction costs more predictable, hence avoiding volatile and exorbitant gas fees for users.
As per Djed’s research paper Djed is the first formally verified stablecoin protocol and it works like an autonomous bank
"that buys and sells stablecoins for a price in a range that is pegged to a target price."
Source: Djed
According to the COTI team, stablecoins are a 'killer app' that will be adopted by a huge number of crypto users for settling payments and covering fees. COTI was the first recipient of equity investment from the cFund for Cardano developments.
IO Global CEO Charles Hoskinson 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.'
Well, the announcement comes following the news Coti partnered with Cardano’s stablecoin hub Ardana to pilot decentralized stablecoin payments to AdaPay. AdaPay is a Cardano payment gateway supporting more than 30 fiat currencies.