A new decentralized stablecoin based on smart contract platform Cardano (ADA) is quickly gathering millions of ADA in its reserves.
According to data from Djed (DJED), the new stablecoin has seen a parabolic rise in its reserve assets, leaving it overcollateralized as intended.
The data shows that DJED has a 591% reserve ratio with just over 27 million ADA tokens backing it at time of writing. Djed’s website also gives insights into the stablecoin’s mechanism and how it aims to remain stable due to over-collateralization.
“DJED is an overcollateralized stablecoin that uses exogenous collateral to ensure stability. The protocol is backed by 400%-800% over-collateralization and is guaranteed by its reserve coin, SHEN.
The stability of DJED is based on over-collateralization, which eliminates the need for trust in a governance protocol as seen in algorithmic stablecoins.”
DJED, created by payments platform COTI Network (COTI) and backed up Cardano’s native asset, officially launched earlier this week on the Cardano blockchain.
Before its launch, COTI said that it had made significant changes to the stablecoin, such as transitioning it to a multi-chain network that supports private payments networks and decreasing its deposit fees by 50%.
According to COTI, these changes will help with the widespread adoption of digital assets as a means of payment for goods and services.
“This launch signifies a massive step for the crypto industry, as well as COTI, as the [upgrade] will increase the growth of the widespread adoption of crypto payments for enterprises that are yet to adopt crypto payment solutions.”
ADA is trading for $0.374 at time of writing, a 3.36% drop on the day.
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