Is Djed Stablecoin Pumping Up Cardano Price?
As the launch of Djed stablecoin (Djed) approaches, Cardano’s price growth momentum is increasing. The price of Ada has not yet undergone a parabolic movement, but this may happen.
According to Valx and quoted by BeinCrypto, there has been a lot of noise recently about the launch of a new project in the Cardano ecosystem. Djed Stablecoin is a new algorithmic overcollateralization that is backed by the ADA currency. This stablecoin is backed by the IOG Foundation and uses Coti’s layer one network.
Jed’s launch is planned for this month, but no exact date has been announced yet.
Jed intends to enter the competitive market of stable coins; A market that currently accounts for 13% of the total crypto market cap and one out of every three top market members is a stablecoin.
In appearance, Djed uses the same formula as stablecoins such as FRAX. This stablecoin is backed by Cardano Collateral (ADA) and a reserve token called SHEN. By burning and minting “sand”, the parity of the price of Jed with the dollar is controlled.
Users can receive this token in return by sending Cardano to Jed’s smart contract. “Sand” token is responsible for maintaining price balance during ADA price fluctuations. Unlike the forex model that benefits from the incomplete or deficit backing model, in the Jed model the value of the collateral will be much higher than the received stablecoin. The blog post introducing this stablecoin states:
The amount of Jed’s collateral will be 400-800%, which means it will be backed by 4-8 times the value of the minted stablecoin.
The launch of this stablecoin will probably increase the total value locked in the ecosystem and increase the price of Cardano.
The state of Cardano’s DeFi sector this year has been spectacular. Cardano’s analysis shows that the TVL of this area is now slightly less than 100 million dollars, which has grown by 50% since the beginning of 2023. The total locked value of Cardano’s DeFi domain is now at its highest level since October.
The price of Cardano has not changed much in the past few days and remains in the range of $0.35. However, in the previous two weeks, the coin had a good rally and increased its value by 40%.
By Stablecoin “Djed” Pumps Cardano Price? The first time in the blog Valx. appeared.