Cardano Prepares For Assault On DeFi, Unveils New Stablecoin

Cardano is close to its final Hard Fork Combinator (HFC) event “Alonzo” to implement smart contract capabilities on the mainnet. Developers, community projects, and IOG are preparing for the milestone and the potential growth of the network’s ecosystem. Recently, IOG released a paper describing a new algorithm stablecoin to be launch on the platform, called Djed. The project has been under development by IOG and partners Emurgo, and Ergo blockchain, as a “stablecoin contract”, Cardano’s developer claimed in an official post. This digital asset will tackle the most common issues with other stablecoins, such as Tether and USD Coin, such as lack of transparency about their reserves and its liquidity. Thus, it will leverage a smart contract to guarantee the stability of its price. IOG said: Djed is a crypto-backed algorithmic stablecoin contract that acts as an autonomous bank. It operates by keeping a reserve of base coins, and minting and burning stablecoins and reserve coins. As seen below, this Cardano based stablecoin will operate with an Autonomous “Central bank like” contract. Thus, it’ll be comprised of reserve, equity, and liabilities. In addition, Djed’s stability mechanism will allow the contract to sell stablecoins, and use charging fees, and reserve assets to keep a target price. IOG claims that holders will benefit from this dynamic, as they will be able to boost the stablecoin reserve and “assume the risk of price f...