Cardano has launched its algorithmic stablecoin, Djed (DJED), on its mainnet after a successful security audit.
The stablecoin, backed by Cardano’s native ADA token, is pegged to the US dollar and uses the Shen (SHEN) token as its reserve coin.
Unveiled in November last year, the announcement was met with widespread online debate over the place of algorithmic stablecoins in the future of blockchain, given the collapse of TerraUSD (UST) months prior.
Since then, the market for algorithmic stablecoins has shrunk 10x from its peak prior to Terra’s collapse and many crypto users remain sceptical of the asset class.
Cardano developers have assured the community that Djed is unlike TerraUSD due to it being overcollateralised and having on-chain proof-of-reserves.
Djed was developed by decentralised finance (DeFi) service provider COTI as a solution to improve DeFi and payment options on the Cardano blockchain. It was in development for over a year.
The new stablecoin is one of a series of recent update announcements coming to the Cardano network.
Cardano’s co-founder Charles Hoskinson revealed earlier in January that custom-built sidechains will soon be able to expand the network.
A week prior to Djed’s launch, an anomaly caused half of Cardano’s nodes to disconnect and restart, leading to a network outage.
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