Since the crash of the TerraUSD (UST) algorithmic stablecoin in May 2022, many users in the crypto ecosystem have acquired a weariness against that specific asset class. The market for algorithmic stablecoins has plummeted 10x from its all-time high before the Terra crash.
However, this has not prevented Cardano network engineers from going through with the introduction of the ecosystem’s overcollateralized stablecoin on Jan.31. The new algorithmic stablecoin, Djed (DJED), released on the Cardano mainnet and is tied to the United States dollar and backed by Cardano’s native cryptocurrency, ADA. It employs the Shen (SHEN) token as its reserve currency.
The release states that the new token has only just passed a security assessment and that it has been in development for more than a year. As a method for the creation of new decentralised finance (DeFi) and payment possibilities, DJED is a product that was developed by Coti, a developer of DeFi solutions that runs on the Cardano blockchain.
The concept of bringing into existence yet another algorithmic stablecoin produced tremors among members of the online cryptocurrency community prior to the debut of the brand new Cardano stablecoin.
This is one of the most recent updates in a series of recent updates that have come out of the Cardano network. These updates include an announcement made on January 12 by co-founder Charles Hoskinson that the ecosystem will expand via custom-built sidechains. This is one of the most recent updates in this series.
On January 23, an anomaly caused fifty percent of Cardano nodes to become disconnected and need a restart; this resulted in an interruption of network service. This was only one week before to the introduction of the brand new algorithmic stablecoin.
According to a report by Bloomberg from the beginning of the year 2023, the risk assessment company Moody's Corporation is in the process of building a score system for stablecoins. This system will include an initial examination for up to 20 digital assets.