As the agenda for the launch of stablecoin Djed draws near, the Cardano network is starting to see a resurgence in momentum. Meanwhile, the ADA price itself does not seem to have a significant movement. Even so, fantastic price action could be imminent in the near future.
In fact, the hype surrounding Cardano's latest project, which will be released in its ecosystem, is only getting bigger. The project is called Djed, an over-collateralized algorithmic stablecoin backed by its own ADA crypto asset. Apart from that, the party that developed this stablecoin is also Cardano supporters, IOG. Not only that, the project also has the support of Coti, a scalable layer-1 enterprise network.
As planned, Djed is scheduled to be ready for release this month as well. Even so, they have not set an exact date.
With the presence of the Cardano stablecoin, Djed will officially enter the stablecoin market which is full of enthusiasts. What's more, this market accounts for 13% of all crypto market capitalization and almost a third of the top ten assets.
TVL DeFi Cardano Soars 50%
At first glance, Djed actually only uses a concept similar to that of stablecoins like Frax. The way it works, Djed will use collateral from ADA and a reserve coin called SHEN. Then, include it in the printing activity and apply the burning mechanism. The goal, of course, is for Djed's dollar peg to remain stable.
In the process, the system will send ADA to the Djed smart contract to get the Djed assets in return. Furthermore, Shen will act as a counterweight if later the ADA price fluctuates. Unlike Frax which uses a fractional collateral model with USDC and FXS, Djed's over-collateral will use ADA. According to a recent Coti blog post:
On the other hand, its launch also has the potential to increase total value locked (TVL) in the Cardano ecosystem. And it's also possible that it will bring ADA prices up.
TVL DeFi Cardano TVL this year has been observed to have greatly reduced. However, since early 2023, its TVL has managed to register a 50% increase, and is currently just under US$100 million. Also, according to DeFiLlama, TVL DeFi Cardano is now at its highest level since early October last year.
In addition, dApp ecosystem activity on the Cardano network is also increasing. The leading DApp on the Cardano network today is the NFT marketplace jpg.store, recently followed by Minswap DEX.
