Since the fall of the TerraUSD (UST) algorithmic stablecoin in May 2022, many users in the crypto space have developed a weariness toward that particular asset class. The market for algorithmic stablecoins has declined 10x from its all-time high before the Terra collapse.
However, this has not stopped Cardano network developers from pushing forward with the launch of the ecosystem’s overcollateralized stablecoin on Jan.31. The new algorithmic stablecoin, Djed (DJED), launched on the Cardano mainnet and is pegged to the United States dollar and backed by Cardano’s native cryptocurrency, ADA. It uses the Shen (SHEN) token as its reserve coin.
According to the announcement, the new token recently completed a successful security audit and was under development for over a year. DJED is a product of Coti, a decentralized finance (DeFi) solutions developer on the Cardano blockchain, as a means for new DeFi and payment opportunities.
Cointelegraph reached out to the developers for further comments on the launch.
Prior to the launch of the new Cardano stablecoin, the idea of bringing another algorithmic stablecoin into existence caused tremors among the online crypto community.
Related: Buterin: How to create algo stablecoins that don’t turn into ponzis or collapse
This is one of the latest in a series of recent updates coming out of the Cardano network, which included an announcement from co-founder Charles Hoskinson on Jan.12 that the ecosystem will expand via custom-built sidechains.
On Jan. 23, due to an anomaly, 50% of Cardano nodes disconnected and had to restart, which caused a network outage. This was only one week before the launch of the new algorithmic stablecoin.
At the beginning of 2023, Bloomberg reported that the risk assessment firm Moody’s Corporation is developing a scoring system for stablecoins, including an initial analysis for up to 20 digital assets.