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The Cardano community expressed collective excitement following the launch of the much-anticipated ADA-backed stablecoin Djed.
Thanks to the collective efforts of the COTI network and Cardano Output Global developer Djed, the overcollateralized stablecoin is now active on the Cardano mainnet.
In a recent blog post by the COTI network following the launch of Djed, COTI explained the relevance of the stablecoin launch in the DeFi ecosystem.
“Launching Djed is an important milestone for COTI, the Cardano ecosystem, and the DeFi ecosystem as a whole. Being a decentralized open source protocol, Djed is community driven, as it provides an opportunity for users to own, create, and burn DJED and SHEN.” COTI wrote in his blogpost.
Djed is USD pegged, ADA backed, and uses SHEN as its back up coin. Djed also uses over-collateralization and on-chain proof of reserves to maintain its value in a highly volatile market.
   
Djed is expected to position Cardano for broader opportunities within the DeFi ecosystem, having secured 40 partnerships designed to accelerate its utilization.
Singapore-based cryptocurrency exchange Bitrue will be the first exchange for DJED and SHEN. Additionally, Djed is also available on the Wingriders DEX exchange, and on Cardano’s two leading DeFi platforms, MuesliSwap and MinSwap.
Even though Djed’s reserve ratio is currently between 400% – 800%, COTI explains what will happen if it falls below that point.
“If the reserve ratio drops below 400%, the platform will prevent burning SHEN and printing new DJED (due to insufficient collateral in reserves). If the ratio exceeds 800%, users will no longer be able to print SHEN, however, they will still be able to print and burn DJED. In any scenario, DJED can always be redeemed.” COTI added in blogpost.
What to expect from Djed in the long term
To provide liquidity, Djed 1.1.1 will provide delegation rewards, including SHEN printing and burning fees for SHEN holders. LP and farm rewards will also be accessible to SHEN holders via DEX Wingriders, Minswap, and MuesliSwap.
At the end of the year, the COTI network plans to introduce Djed Version 1.2. This version will enable Vasil features and include a reference script for increased scalability.
Djed 1.3 is also expected to follow later. It will come with dynamic costs and prices. It will also support a “progressive delegation program” which is expected to deliver liquidity.
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