DJED, a new algorithmic, over-collateralized stablecoin, has just launched on the Cardano blockchain, coming after a period of one year where it underwent a security audit.

Congratulations to the team @COTInetwork on the launch of #DJED #Shen today and another great step forward in the continuing evolution of the #Cardano #DeFi ecosystem 👍@Cardano @Cardano_CF https://t.co/NEnFAErkFp

— Input Output (@InputOutputHK) January 31, 2023

According to Coti, the project team, $DJED is an over-collateralized stablecoin that uses exogenous collateral ($ADA) to ensure stability. The protocol is backed by 400-800% over-collateralization and is guaranteed by its reserve coin, $SHEN.

After the collapse of $UST and $LUNA in 2022, non-fiat stablecoins fell out of favor, but DJED has several advantages over other stablecoins.

For instance, DJED is said to be community-driven, enabling the community to create the reserve token, $SHEN, and benefit greatly from the stablecoin’s success.

The stability of $DJED is based on over-collateralization, which eliminates the need for trust in a governance token as seen in algorithmic stablecoins. The platform is also fully decentralized and community-driven, allowing for open-source development and community involvement in minting and burning $DJED and $SHEN.

$SHEN token, DJED’s reserve coin, plays key roles:

• $SHEN is the incentive to make the system over-collateralized
• Keep a healthy reserve ratio in the contract and incentivize users to provide stability to the contract by bringing $ADA to the contract
• In order to ensure there’s enough $ADA in the pool, $DJED is over-collateralized by 400%-800%

Contrary to stablecoins, reserve coins don’t have a fixed value and can experience changes in price like any other cryptocurrency, such as $ADA. The design of the contract links the price of the reserve coins to the overall sentiment towards $ADA. Therefore, an increase in the value of the $ADA token results in an increase in the price of the reserve coin.

$SHEN’s minimal price is 1 $ADA, and $SHEN’s initial price is 1 $ADA.

You can access the DJED platform at djed.xyz.

$DJED is also available on MinSwap, Wingriders, and MuesliSwap and is expected to be listed on other top platforms in the Cardano ecosystem. Bitrue was recently announced as the first exchange that will list $DJED and $SHEN.

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