COTI will issue the first stablecoin on Cardano

Software development company COTI has announced the release of its first stablecoin to run on Cardano.

News for the first time Disclosure by Charles Hoskinson, creator of Cardano, and Shahaf Bar-Geffen, CEO of the COTI Group, at the Cardano Summit in Laramie, Wyoming.

Released on Cardano, stablecoin Djed will accelerate the growth of this emerging ecosystem, especially now that blockchain begins to support smart contracts and the market has strong growth expectations of the “destroyer of Ethereum” in the future.

What is Djed and why does Cardano need stablecoins?

A stablecoin is a cryptocurrency that is used to maintain a stable value in relation to a reference value. The best-known stablecoins are cryptocurrencies such as USDT or Stasis, which are linked to fiat currencies such as USD or Euro. However, there are cryptocurrencies whose value is tied 1: 1 to other commodities such as gold (typically Digix) or even to other cryptocurrencies or crypto baskets.

There are several methods of achieving this relationship and they are more effective than others. The most common is HODL or locking a reference value that supports the issuance of a corresponding amount of stablecoins. For example, the market cap of USDC is $ 3,677,063,935 as there are $ 3,677,063,935 in circulation and Circle holds $ 3,677,063,935 in collateral.

In Djed’s case, the value is held constant through an algorithmic design that uses the smart contract design on the Cardano blockchain to keep a price as close to $ 1 as possible. To do this, Djed maintains a reserve of base coins while mining and burning other stable assets, and also reserves coins to withstand volatility.

Visual representation of the design of the Djed algorithm that will work on Cardano. Source: IOHK

follow White paper, there will be two versions of Djed: a minimal version that is mainly used as a medium of exchange, and an advanced version with smart contracts that use a permanent pricing model and flexible fees levels and offer further security when performing complex operations like those in the DeFi -Log are run.

A promising development

Shahaf Bar-Geffen, CEO of COTI Group, said at the conference that using a stablecoin like Djed would allow users to have more control over their transactions thanks to its stable value and low fees.

| Blockchain participants use stablecoins to conduct daily transactions as they enable a seamless exchange of currency values ​​regardless of the location of the sender and recipient. I believe that adding Stablecoin Djed to Cardano will greatly improve the way transactions are processed on the platform. “

For his part, Charles Hoskinson is excited about this new project as it will be one of the most ambitious implementations to strengthen the Cardano ecosystem.

“Stablecoin Djed could be a game changer in the crypto space and attract a whole new audience at a time when the industry is booming. COTI is a longstanding partner of the Cardano ecosystem. It’s great to have them on this new project. “

This seems like a big step for COTI. When the partnership with Cardano was first announced, the COTI token soared 50%, hitting an all-time high (ATH) of $ 0.6 in just a few hours.

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According to Cryptopotato

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