Stablecoin Djed is expected to drive new growth and new use cases in the emerging decentralized finance (DeFi) space within the Cardano ecosystem. In the past few weeks, the developer of Djed, COTI Network, stated that the stablecoin will definitely be released in January.
In the Cardano community, however, there has been some speculation recently about how far preparations for the launch of the stablecoin, which was announced back in November, have progressed. To quell the speculation, COTI has now published a new blog post confirming the launch next week. However, the exact date is still pending.
“We are pleased to share another update on Djed’s progress and to inform you that the launch is scheduled for next week,” the announcement said.
In addition, COTI announced that the cryptocurrency exchange Bitrue will list Djed and SHEN. Djed’s DEX partner Wingriders also hinted on Twitter that an announcement was coming.
As for the development of Djed technology, the COTI team said that they have started the process of synchronizing the chain index.
“This process takes 14 days, and when we started synchronizing a week ago, we expected it to be finished next week and ready for launch. At the moment, this is the only technical bottleneck that keeps the launch going,” said COTI.
In addition, the company is still working on a snapshot mechanism and user interface that will allow tracking of additional rewards for SHEN holders who deposit and stack ADA into the Djed smart contract.
Will Djed Awaken the Cardano DeFi Ecosystem?
The launch of Djed was accompanied by high expectations as the stablecoin has been absent from the Cardano ecosystem until now. Stablecoins are very important for implementing low cost strategies, especially in the field of DeFi.
Djed also entered the crypto market where stablecoins have become increasingly important in recent years. In the top 10 cryptocurrencies by market cap, there are no less than three stablecoins, Tether (USDT), USD Coin (USDC), and Binance USD (BUSD), which are pegged 1:1 to the US dollar and supported by various forms. of fiat money reserves.
Cardano-based stablecoins, on the other hand, are designed to ensure price stability through reserves in ADA. Initially, the team called it an algorithmic stablecoin but has since dropped the word – perhaps given the terrible memories of Terra Luna and the algorithmic stablecoin UST, which is backed by BTC.
COTI calls Djed an overcollateralized stablecoin, whose coverage in ADA is at least four times that of the issued Djed. With this, the Cardano stablecoin shows certain similarities to the Tron (TRX) ecosystem, where the USDD overcollateralized stablecoin is based.
However, the USDD has also struggled to defend its peg to the USD lately. However, USDD is very happy. The stablecoin of the Tron ecosystem has a market capitalization of $716 million. Perhaps because of this, Tron’s DeFi ecosystem is larger ($5.1 billion TVL) than Cardano’s ($73 million TVL), according to DeFiLlama data.
Can ADA Reach $1 After Djed Release?
If the Djed concept works, the stablecoin could greatly improve Cardano’s DeFi ecosystem. But Djed must pass the field test first. In addition to the great potential, there is also a risk of failure similar to Terra’s UST. This could damage the Cardano ecosystem and the price of ADA.
But if Djed succeeds, it could give the ADA a big boost. A look at Cardano’s 1-day chart shows that the price has broken out of an eight-month downtrend and has successfully handled the mid-January retest.
The next major price target is the resistance zone around $0.41, which has been a long-term support. If this resistance falls, $0.75 will be the next target before $1 can be on the cards.
Featured image from AnTa_ranga / Pixabay, Chart from TradingView.com