The Cardano chain is experiencing rapid growth, with the expansion of Djed and the DeFi ecosystem at its core. In this article, we will explore the impact of these elements on the future of Cardano in detail.
Features and Mechanism of Djed
Djed is an algorithmic stablecoin operating on the Cardano chain, with a circulating supply of 4.2 million tokens. This stablecoin features over-collateralization, which means that the value of the assets provided as collateral is significantly higher than the value of the stablecoin itself, ensuring price stability.
Djed is based on Cardano’s native blockchain token, ADA, and uses SHEN as its reserve coin. A reserve coin is a cryptocurrency held to back the value of a stablecoin. Djed is also an algorithmic stablecoin backed by Bitcoin, designed to maintain price stability. Additionally, Djed is covered by a 380% reserve ratio, with the current circulating supply being about four times the issued coins, providing additional security.
Djed was conceived by IOG, which leads Cardano’s development, and is issued by the COTI Group. The stablecoin was announced in September 2021 and introduced this year. According to Djed’s website, $DJED is backed by 400-800% over-collateralization and the reserve coin $SHEN. Furthermore, the website explains that the protocol’s over-collateralization eliminates the need for trust in governance tokens in algorithmic stablecoins.
DeFi Ecosystem Expansion and Cardano’s Growth
The decentralized finance (DeFi) ecosystem on the Cardano network is growing rapidly. Since the beginning of the year, the total locked value has increased by over 250%, 124 projects have started on Cardano, and 81,000 native tokens have been deployed under 71,500 token policies. As a result, the Cardano chain has become an attractive option for investors and developers.
Adoption of Djed in Decentralized Exchanges (DEX)
Many exchanges operating on Cardano, including MuesliSwap, Minswap, and WingRiders, support Djed. This improves the liquidity and convenience of the Cardano chain, giving users more options when utilizing stablecoins.
$SHEN Reserve Coin and User Contributions
To contribute to the stability of Djed’s USD peg, users actively participate in trading by buying and selling SHEN. They can also receive a portion of the transaction fees from the reserve pool, allowing them to profit from short to medium-term price fluctuations. This enables users to support Djed’s stability while also managing their own assets.
Introduction of Projects to the Cardano Chain and Future Prospects
Cardano is expected to continue growing as new projects are introduced and existing projects expand. The Cardano chain will continue to foster innovation and provide a stable investment environment.
Cardano’s rapid growth is fueled by the expansion of Djed and the DeFi ecosystem. These elements contribute to the future reliability and stability of Cardano, making it an attractive option for investors and developers. As Cardano continues to grow and promote innovation, users can enjoy a stable investment environment.