Djed is a new stablecoin by Cardano, a public blockchain platform. Djed, the algorithm-based stablecoin, uses smart contracts for price stabilization. Therefore, the coin can be used for Decentralized Finance (DeFi) services.
Djed keeps a base of reserved coins within the Cardano ecosystem. It is also operated by minting and burning the stablecoins and reserve coins.
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According to sources, Djed is not just another stablecoin by Cardano. It is designed to become the ultimate coin for Cardano’s blockchain so that Cardano’s entire network transaction fees can be paid through Djed. This will provide credibility to the transaction costs. Djed will provide predictability of costs instead of dealing with volatile gas fees.
According to Hoskinson, COTI was informed about their intention related to the stablecoin in August itself. During Cardano’s growth plan presentation in August, they stressed putting special efforts on stablecoins. Stablecoin apps are expected to be adopted by the masses for payments and fees.
He added that for the time being, they plan to issue stablecoins to enterprises or merchants present on COTI’s Trustchain. Later, the stablecoins can be issued on other chains a well.
COTI had the opportunity to be the official issuer of Djed due to equity investments and other long-term relations with Cardano. COTI, being the issuer, has to assume the responsibility for publishing smart contracts for Djed. COTI also requires to be at the front end and engage with different clients willing to invest in Djed.
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COTI collects a fee for minting and burning of Djed and also for the reserved coins. In the near future, the plan is to introduce $COTI and deposit fees through $COTI into COTI’s treasury, which will boost its ecosystem.
