Djed, Cardano’s Algorithmic Stablecoin, Trades at Greater Premium than Tether’s USD Amid Stablecoin Turmoil
In recent days, the stablecoin sector has been rocked by a storm, with many stablecoins experiencing a decrease in value. However, one stablecoin, Djed, developed by COTI on Cardano, has bucked the trend and gained a premium over the rest of the market, at one point even trading at $1.08 against the dollar. Djed has been trading at a premium compared to the largest stablecoin, Tether (USDT), with a capitalization of $72.1 billion, according to CoinMarketCap.
The difference between USDT and Djed is now 1% in favor of the latter. This stablecoin has also continued to grow in trading volume, currently standing at $545,252, up 268% from the last two days. The crisis in the stablecoin sector has been the first major test for Djed, which was launched on Cardano’s core network just over a month ago.
Djed is an algorithmic stablecoin with redundant collateral, developed by COTI. The stablecoin operates on the principles of maintaining a stable value through the use of complex algorithms and other mathematical mechanisms. Djed’s current reserve is 33.28 million ADA, which is 428% collateral. The circulating offer of the stablecoin currently stands at 2.4 million Djed.
Cardano founder Charles Hoskinson has expressed his belief that algorithmic stablecoins are the key to achieving Bitcoin’s original vision. Hoskinson argues that algorithmic stablecoins offer a more reliable alternative to traditional banking systems, which are prone to fractional reserve lending and other forms of instability. By contrast, algorithmic stablecoins are designed to maintain a stable value through the use of complex algorithms and other mathematical mechanisms.
The community is now waiting to see what further steps will be taken in the stablecoin sector. However, the success of Djed is a positive sign for the stability of algorithmic stablecoins and may prompt further development and adoption of this type of stablecoin in the future.
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