COTI mints new Cardano stablecoin called Djed

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COTI will create Cardano’s new stablecoin – Djed – which was trumpeted by umbrella company IOKH founder Charles Hoskinson at the weekend.

Djed will be entering an already busy stablecoin marketplace in which Tether and USD Coin are most prominent, but Djed is set to be the only stablecoin on the Cardano network.

The project will be based on an algorithmic design that uses smart contracts to maintain price stabilisation. It will provide decentralised finance tools, make transaction costs more reliable, and reduce volatile transaction fees that can arise on the network.

IOHK says Djed will operate by maintaining a reserve of base coins, although it has not been made clear which coins these will be.

According to Djed’s research paper, the authors believe it will be the first stablecoin “where
stability claims are precisely and mathematically stated and proven”. Furthermore, the proofs will be verified twice using two separate techniques.

However, the announcement does not seem to have been able to reduce the month-long downward trend for Cardano. Its market value peaked at just over $3 in early September but it has seen a steady decline since then falling close to $2.

“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,” declared Hoskinson.

“Djed shares our commitment to formal verification, proving a robust method of combating price volatility of crypto markets.”