Cardano is nearing its latest “Alonzo” Hard Fork Combinator (HFC) event to implement smart contract capabilities on the main grid. Developers, community projects, and IOG are gearing up for the milestone and potential growth in the network ecosystem.
IOG published a recent article that described Djed, a new stablecoin-based algorithm, to launch on the platform. IOG and its partners Emurgo as well as Ergo blockchain are working on the project, Cardano’s creator, said in a statement. official post.
This digital asset will address the most common problems with stablecoins like Tether and USD Coin. For example, lack of transparency on reserves and liquidity. To ensure stability, it will use smart contracts. IOG said:
Djed is an encrypted algorithmic stabilitycoin contract that acts like a standalone bank. It works by maintaining a stash basic coins and hitting and burning stable coins and reserves coins.
As can be seen, this Cardano based stablecoin will work in conjunction with a stand-alone contract of ‘central banks-type’. It will consist of the reserves, equity, and liabilities.
Djed’s Stability Mechanism, which will allow the contract sell stable coins, use billing fee and reserve assets to maintain an target price, will also be available. IOG claims this momentum will help holders to increase their stablecoin reserve and “bear any price movements.”
Djed can be pegged to any currency, not just the dollar. It can also be used with other currencies as long as there is an oracle that provides the contract with the appropriate price index.
Cardano Stablecoin: Better than the competition
Charles Hoskinson, IOG CEO and inventor of Cardano, is the cardano inventor FamousDjed’s paper was released. Hoskinson also revealed that the Plutus team was currently working on a prototype, and most likely will be after HFC Alonzo.
IOG believes that Djed is “proven mathematically” to be part of Cardano’s philosophy. This allows it to achieve a consistent peg at the underlying assets with lower maintenance, resilience to sudden markets spikes or falls, and no insolvency.
According to the official publication, this mechanism will promote fair treatment for all users. This encourages holders not to sell their coins and allows them to “dilut” their coins to issue more. The stablecoin_will further benefit holders.
(…) The reserve surplus per spare part is guaranteed to increase as users interact with the contract. These conditions ensure that reserve coin holders will reap the benefits of them.
The Cardano-based stablecoin will be launched in two versions: the minimal Djed, a “simple and intuitive” stablecoin, and the extended Djed. According to IOG, the latter will offer greater stability and provide more incentives to maintain the reserve rate at an “optimal level”.
Stablecoin is already available on Ethereum as an ERC-20 token. It can also be used as a Binance Smart Chain token, Avalanche Smart Chain token, Polygon token, and other ecosystems that are part of the tesnet program.
Cardano (ADA), which trades at $ 2.30, is currently experiencing an 8.5% rise in the daily chart.