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4 Jan 2023
In January 2023, Cardano Will Launch an Algorithmic Stablecoin
Image credit: CoinGape
Cardano, one of the world's leading blockchain networks, is set to launch an algorithmic stablecoin in January 2023. This exciting development will further enhance the growing use of digital currencies in everyday life.
The new stablecoin will be built on the Cardano blockchain, using a groundbreaking algorithmic approach to ensure value stability and mitigate risks associated with other stablecoins.
Developed in collaboration with COTI, the DAG-based Layer 1 protocol, Djed's algorithm will be backed by excess collateral using a cryptocurrency reserve.
According to developers, it will be pegged to the US Dollar, backed by Cardano ($ADA), and use $SHEN as its reserve currency.
ADA will be listed on decentralized exchanges (DEXs), where users will be rewarded for providing liquidity to Djed. It is expected that the stablecoin will receive liquidity slowly and gradually to maintain its health.
COTI CEO Shahaf Bar-Geffen said at the Cardano Summit: "Recent market events have proven again that we need a haven from volatility, and Djed will serve as this haven in the Cardano network. Not only do we need a stablecoin, but we need one that is decentralized and has on-chain proof of reserves."
With the collapse of the Terra ecosystem and its TerraUSD stablecoin in May, many engineers began abandoning their focus on developing algorithmic stablecoins.
The new algorithmically-driven stablecoin will be essential to Cardano's plans for a fully decentralized, secure, and reliable financial system. It will also offer several practical benefits to users, such as lower transaction costs and fast settlement times. Furthermore, it is expected to boost the wider cryptocurrency ecosystem by bringing further legitimacy to the space.
Aside from launching an algorithmic stablecoin, Cardano is also making moves to improve its infrastructure and help it become an attractive platform for developers and businesses. In particular, it focuses on creating a robust and easy-to-use interface that allows developers to build applications more quickly and easily.
In addition to the stablecoin launch, the company invests heavily in various initiatives to make its platform more appealing to businesses and developers alike. This includes enhancing security features, improving scalability, and providing support for more dApps and smart contracts.
As the world increasingly moves towards digital payments, Cardano's new algorithmic stablecoin could prove to be an incredibly useful tool for individuals, businesses, and developers alike.
Its potential to provide a safe, reliable, and cost-effective way of transferring value is likely to be welcomed with open arms by many. With Cardano at the helm of this development, we can only hope it successfully delivers on its promises.
Also read: The Cryptocurrency Exchange Coinbase Got Approval to Operate in Singapore.
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