Cardano (ADA) developer Input Output has during the Cardano Summit 2021 announced that COTI will be the official publisher of the new Cardano stablecoin, called Djed. The stablecoin uses an algorithm to keep its value stable.
While companies like Tether try to keep the value of their USDT stablecoin stable by holding a reserve, an algorithmic stablecoin works differently. For every USDT in circulation, Tether keeps a dollar (or something of equivalent value) in its reserve. This works well, but at times of sudden high demand it is difficult to keep USDT stable at $1.
Djed uses smart contracts to automatically respond to such fluctuations. It holds an amount of BaceCoins but also sells and buys ReserveCoins to keep the final value of Djed stable. Below is an image of how it works:
From yesterday’s announcement, it appears that COTI will be the official publisher of Djed. COTI is a platform that builds a finance ecosystem on the blockchain.
COTI is the official issuer of Cardano’s stablecoin!
As just revealed during the @CardanoStiftung summit by none other than Charles Hoskinson, COTI will become the official Djed issuer, Cardano’s new stablecoin!
Read more: https://t.co/omAxVZUOow$COTI $ADA @IOHK_Charles pic.twitter.com/yschC9wdbd
— COTI (@COTInetwork) September 26, 2021
Cardano founder Charles Hoskinson says of the news:
“The Djed stablecoin could be a game-changer in the crypto space, appealing to a whole new audience at a time when the industry is already experiencing astronomical growth. Djed shares our commitment to formal verification, demonstrating a robust method to combat crypto market price volatility.”
Cardano has already announced some interesting collaborations in recent days. That’s how it goes collaborating with the developers of Chainlink (LINK) if she oracles to get on Cardano. The developer of Cardano will also collaborate with major US satellite television provider DISH Network.
It was also previously announced that COTI will partner with Cardano’s stablecoin hub Ardana. COTI’s cryptocurrency then saw a rise of nearly 40%. The news that COTI will issue the Djed stablecoin does not seem to have had any effect on the price for the time being. Nevertheless, COTI is more than 1,000% in the plus in 2021.
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