Djed, Cardano's first decentralized stablecoin, will go live on the main network in January.
Developers announced the move at the Cardano Summit event in Lausanne, Switzerland. Djed is a decentralized stablecoin soft-pegged to the U.S. dollar that will exist on Cardano’s Layer 1 blockchain.
Backed with crypto assets instead of fiat money, Djed has been developed by a firm called Coti in collaboration with Cardano lead developer Input Output.
The stablecoin has been in development for more than a year. Once launched, Cardano users will be able to take ADA — the native cryptocurrency of the Cardano network — and use it as collateral to mint the stablecoin.
The stablecoin is designed to be overcollateralized, meaning that it is backed by excess collateral in the form of cryptocurrency held in a reserve. This is a similar design used by dai, the most popular decentralized stablecoin in the Ethereum ecosystem. Each Djed will require more than 400% in collateral value to be minted.
"Djed takes what's great with crypto as collateral, meaning no fiat in the system, but also takes over-collaterization very seriously," Coti CEO Shahaf Bar-Geffen told The Block.
At its launch, Djed will be integrated into 40 apps in the Cardano ecosystem, Bar-Geffen said. The launch will also come with the introduction of DjedPay, a service that will let merchants and other crypto players accept Djed payments.
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