Despite the fact that the algorithmic stablecoin market has deviated from its stable price more than once, this did not stop the Cardano developers from releasing their own stablecoin called DJED. It appeared on January 31, 2023 and instantly attracted the attention of the crypto community.
Almost immediately, however, DJED ran into a couple of problems, including the price, which recently dropped below $1. In this article, we will learn the history of the stablecoin from the creators of Cardano, and explore the possible reasons for the early price drop.
DJED Cryptocurrency
DJED is an ADA-backed, redundant stablecoin. DJED is hosted on the Cardano network and works by storing a reserve of coins, creating them, and burning them. Jed's protocol is initially mathematically verifiable. Using an algorithmic smart contract, he buys and sells DJED coins to maintain a stable price.
If we talk about the DJED application, it is made for various purposes, such as payments, loans, banking services, payroll, money transfers, etc.
Djed's research work is created by the IOG team and supported by Coti.
DJED Roadmap
Djed has a roadmap - the team has identified key development stages that are accessible to every interested user.
As we see , Djed will have several versions starting from 1.1.1. and up to 1.3. The first update includes compatibility with the Vasil hard fork, rewards for SHEN holders from day one, and a code audit.
The second update will use the Vasil and Plutus V2 hard fork. The third version will have dynamic fees and costs, as well as extensive delegation support. There are plans to add various coins as collateral, in addition to ADA.
According to the developers, Djed will also have an application called Djed Pay, which will allow merchants and non-profit organizations to receive DJED as payment.
What's special about DJED?
Now let's discuss the most important topic - what does DJED offer? Is there anything special about this stablecoin? Of course, every project that appears on the market has a list of unique features.
It is claimed to be the first officially verified stablecoin protocol. The use of formal methodologies in the programming process played an important role in the design characteristics and stability of Djed. Using formal methods, properties are proven using mathematical theorems:
The price of DJED has fallen below $1 - what happened?
However, not everything has been so smooth with DJED lately. Almost immediately after launch, the price of the stablecoin fell below $1.
The short-term decoupling of Djed occurred due to for lack of liquidity. This deviation may be due to the formation of a new algorithmic stablecoin project.
The DJED stablecoin algorithm differs significantly in its approach to the provision and implementation of technology from the collapsed stablecoin UST, which operated on the blockchain Terra< /a>. In addition to SHEN, the developers plan to supplement the list of collateral assets with BTC and ETH, wrapped in the Cardano network to fix the peg to the dollar.
DJED is already integrated into decentralized exchanges in the Cardano ecosystem, such as MuesliSwap, MinSwap, WingRiders, and will be added to the DeFi projects of this network.
Let's also not forget that popular projects of centralized stablecoins USDT and USDC with fiat collateral and securities packages also have the possibility of short-term deviation from the US dollar:
Conclusion
DJED is a new stablecoin, this is the reason why many investors panicked when they saw the price drop. Time passes, the collateral mechanism stabilizes, and the price of the stablecoin returns to $1. Such a drop should not be considered a huge anomaly, and those who bought DJED are better off being patient and waiting for it to stabilize.
