Cointime

Download App
iOS & Android

Cardano To Launch Its Very Own U.S Debt Backed Stablecoins “Djed”

Cardano blockchain has made quite a name for itself with all that’s been happening in the crypto industry. The blockchain has stayed online and haven’t experienced any form of attack on the network unlike its counterpart Solona that keeps having a network downtime.

Cardano is a public blockchain with Charles Hoskinson Ethereum co-founder as the founder. The Cardano blockchain achieves consensus mechanism through proof of stake and has over 2,000 Validators across the ecosystem.

The Cardano blockchain was recently hard forked and its Vasil upgrade went live on 22nd of September,2022. The blockchain has maintained stability, security and decentralization. With the Vasil upgrade Cardano blockchain has become faster solving the crypto trilemma which states that a blockchain can’t be Fast, Secure and Decentralized.

Unfortunately, even with all this, the blockchain native cryptocurrency Ada isn’t doing so well compared to what was expected of it and has remained stunted over the past years. Regardless it is notable to cite that Cardano currently has over 400 Dapps running on the blockchain and more still developing.

It’s also important to know that Cardano is written in Haskell, which is an advanced programming language and quite hard to code. Cardano was criticized for choosing Haskell as their programming language which can be linked to why there hasn’t been wider adoption of developers building on the Cardano blockchain. While it may look as if Cardano isn’t growing as much as expected, we shouldn’t overlook the fact that Cardano has one of the strongest ecosystem in the blockchain industry and their choice of Haskell as the blockchain programming language is one of the reasons the blockchain has remained highly secured.

With all that has been happening in the crypto industry it is without doubt that only solid platforms, projects and blockchains will survive, and all other inferior ones will go down the drain.

Djed which is the official name of the Cardano blockchain stablecoin will be released in January,2023. It will also be an algorithmic stablecoin.

What is a stablecoin?

A stablecoin is a cryptocurrency that is designed to hold a stable value like a fiat currency. They might be in pounds’ or dollars, and sometimes backed with fiat currency kept in a bank vault. Stablecoins was invented to mitigate the volatility of other cryptocurrencies. For example, when the prices of crypto assets are on the uptrend one can easily convert them to stablecoins in other to maintain its value. Stablecoins are very important in the crypto industry especially in decentralized finance (DeFi).

There are also different types of Algorithmic Stablecoins namely;

1. Rebase stablecoins

2. Seigniorage stablecoins

3. Fractional-algorithmic stablecoins.

Rebase stablecoins:

this type of algorithmic stablecoins is achieved through minting and burning of coins. The protocol adds or removes supply from circulation in proportion to the coin’s price deviation from the $1 peg. If the coin is > $1 more coin will be minted and if the coin is <$1 some of it will be burnt.

Seigniorage stablecoins:

is a multi-coin system, wherein one coin is designed to be stable and at least one other coin is designed to facilitate that stability. I guess this was the same type of algorithmic protocol Terra blockchain used for their UST stablecoin which was to be maintained by Luna coin market price. This however failed after Luna coin went on the downtrend on May 7 and UST lost its peg to the dollar.

Fractional-algorithmic stablecoin:

this is a combination of Seigniorage and part collateralized, it aims to maintain their peg by combining the best mechanisms from pure uncollateralized stablecoins and their collateralized counterparts. This model was also pioneered by Frax Finance.

The stablecoin technology is still an experiment in the cryptocurrency industry and many have tried and failed over the years, but with Cardano we should expect something steady and unique, hopefully their stablecoin might solve the issues with stablecoins maintaining its peg with the U.S dollar.

Charles Honskinson has also been working closely with the U.S congress and it should be expected that the Cardano blockchain we produced something solid. Also if the Cardano Stablecoins fails, I can’t stress how much negative impact it will have on the blockchain. At the same time, I believe that Cardano blockchain is one that we can look out for in terms of delivering stability, this has been proven with all that has happened this year in the cryptocurrency industry.

Cardano blockchain seems to be on a slow and steady win the race mode and this new announcement is likely going to have a positive impact on their native cryptocurrency Ada.

Conclusion

The stablecoins technology is still experimental and has a 50% chance of failing. The crypto industry is still in infant stage and so many things will be tried to make the ecosystem better. Things are getting a little bit messy with Luna, UST, FTX, etc. But all this will help flush out the unsolid projects and the solid stands strong long term. This isn’t a financial advice to stack up Ada, it is only an informative article to get you up to speed with what is currently going on in the Cardano ecosystem.

Comments

All Comments

Recommended for you

  • U.S. Initial Jobless Claims at 206,000 Last Week

    On August 20, the number of initial jobless claims in the U.S. was 206,000, compared to an estimate of 210,000 and a previous value of 209,000.

  • U.S. Initial Jobless Claims at 206,000 Last Week

    On August 20, the number of initial jobless claims in the U.S. was 206,000, compared to an estimate of 210,000 and a previous value of 209,000.

  • Alibaba's Wu Yongming: AI Annual Revenue Exceeds 49.5 Billion Yuan

    On August 20, Alibaba Group (09988.HK) released its financial report for the first quarter of fiscal year 2027. During the analyst conference call, Group CEO Wu Yongming stated that AI has become the core engine driving accelerated growth for Alibaba Cloud. This quarter, the annual recurring revenue (ARR) from AI-related products surpassed 49.5 billion yuan (7.3 billion USD), accounting for 35% of Alibaba Cloud's external commercialization revenue. The gross margin for AI-related products is significantly higher than the average level for cloud products.

  • ETH Surpasses $2300

    Market data shows that ETH has surpassed $2300, currently priced at $2308.28, with a 24-hour increase of 20.06%. The market is highly volatile, so please ensure proper risk management.

  • ETH Surpasses $2300

    Market data shows that ETH has surpassed $2300, currently priced at $2308.28, with a 24-hour increase of 20.06%. The market is highly volatile, so please ensure proper risk management.

  • Meta Invests Hundreds of Millions in Microsoft's Azure AI Services

    Meta Platforms (META.O) is investing hundreds of millions in Microsoft's Azure AI services. Meta has quietly become one of Microsoft's largest AI clients. Shares of Meta Platforms (META.O) and Microsoft (MSFT.O) rose 1.6% in pre-market trading.

  • Meta Invests Hundreds of Millions in Microsoft's Azure AI Services

    Meta Platforms (META.O) is investing hundreds of millions into Microsoft's Azure AI services. Meta has quietly become one of Microsoft's largest AI clients. Shares of Meta Platforms (META.O) and Microsoft (MSFT.O) rose by 1.6% in pre-market trading.

  • X Explores Paying Creators with Stablecoins

    On August 20, sources revealed that Elon Musk's social media platform X is exploring the use of stablecoins, such as Circle's USDC, to pay royalties to content creators and influencers. Discussions are still ongoing. Stablecoins have become an important tool for blockchain payments due to their faster and lower-cost cross-border payment capabilities. Recently, X has also been adjusting its creator incentive mechanisms, planning to replace the original revenue-sharing program with an 'Original Content Reward Program' to reward original content, professional opinions, reporting, creativity, and commentary.

  • X Explores Paying Creators with Stablecoins

    On August 20, sources revealed that Elon Musk's social media platform X is exploring the use of stablecoins, including Circle's USDC, to pay royalties to content creators and influential users. Discussions are still ongoing. Stablecoins have become an important tool for blockchain payments due to their faster and lower-cost cross-border payment capabilities. Recently, X has also been adjusting its creator incentive mechanisms, planning to replace the existing revenue-sharing program with an 'Original Content Reward Program' to reward original content, professional opinions, reporting, creativity, and commentary.

  • Alibaba Q1 Revenue for FY2027 Reaches 269 Billion Yuan, Up 9% Year-on-Year

    On August 20, Alibaba (09988.HK) reported a revenue of 269 billion yuan for Q1 of FY2027, compared to 247.65 billion yuan in the same period last year, marking a 9% year-on-year increase. The external revenue growth of Alibaba Cloud accelerated to 45%, and revenue from artificial intelligence-related products achieved triple-digit growth.