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

  • The Hong Kong Securities Regulatory Commission’s official website has listed the Bitcoin and Ethereum spot ETFs and stock codes of China Asset Management, Bosera and Harvest.

    Hong Kong Securities and Futures Commission website has listed the Bitcoin and Ethereum spot ETFs of three fund companies, Huaxia, Boshi, and Jiashi, with approval dates all on April 23, 2024. The related funds are not derivative product funds, specifically including:1. Huaxia Bitcoin ETF (BUU163) with share codes of 03042, 09042, and 83042;2. Huaxia Ethereum ETF (BUU164) with share codes of 03046, 09046, and 83046;3. Boshi HashKey Bitcoin ETF (BUU104) with share codes of 03008 and 09008;4. Boshi HashKey Ethereum ETF (BUU105) with share codes of 03009 and 09009;5. Jiashi Bitcoin Spot ETF (BUT244) with share codes of 03439 and 09439;6. Jiashi Ethereum Spot ETF (BUU885) with share codes of 03179 and 09179.

  • Correction: Nigeria’s central bank says “freezing Bybit, KuCoin, OKX, Binance user accounts” is unofficial

    The official X account of the Central Bank of Nigeria (CBN) stated that the announcement "the Central Bank of Nigeria will freeze Bybit, KuCoin, OKX, and Binance user accounts" is not an official release. Previously, according to Cointelegraph, the Central Bank of Nigeria (CBN) issued an instruction requiring all banks and financial institutions to identify individuals or entities trading with cryptocurrency exchanges and ensure that such accounts receive no debit (PND) instructions within six months.

  • Alliance of 314: The X314 contract is suspected to have a hidden additional issuance switch, developers should pay attention to verification

    Alliance of 314 issued a statement claiming that the contract of a certain 314 project has not been open-sourced on the blockchain. As for whether other platforms have open-sourced their contracts, there is a misconception that open-sourcing on other platforms is self-submitted and does not necessarily mean that the contract is deployed on the chain, so there may be unknown hidden issuance. Additionally, the said 314 project announced that it will soon launch a trading platform, and the first requirement for logging into a centralized exchange is to open-source the contract. Open-sourcing is the first thing that any project should do to ensure investor confidence. Referring to the open-sourcing of the 0.1, 0.5, and 0.9 versions before, it can be concluded that there is hidden code in the X314 contract, and therefore it cannot be open-sourced out of fear. The biggest risk warning: after decompiling and querying ethervm, it is highly suspected that a certain 314 has a hidden issuance switch to increase mining pool output and arbitrage. The field is as follows: 0x40c10f19mint(address,uint256). The risk alert level for this switch is the highest level, and generally, ordinary developers do not set this switch.

  • Binance Founder Faces Potential Three-Year Prison Sentence and $50 Million Fine for Money Laundering and Sanctions Violations

    Binance founder Changpeng Zhao has been recommended a three-year prison sentence by federal prosecutors for violating federal money laundering laws and sanctions. The Department of Justice argued that this sentence would hold him accountable for his intentional criminal conduct and send a message to the world. Zhao made a "business decision" to break the law to attract users, build his company, and line his pockets, according to prosecutors. Along with the prison sentence, DOJ lawyers also requested that Zhao pay the $50 million fine he agreed to as part of a plea deal. Zhao, who is a citizen of the UAE and Canada, has been released on a $175 million bond but must remain in the U.S. until his sentencing on April 30.

  • Market News: South Africa authorizes 75 companies as cryptocurrency service providers

    According to Jinshi news, South Africa has authorized 75 companies as cryptocurrency service providers.

  • Indonesian President: $8.6 billion laundered through cryptocurrency in 2021

    According to Golden Finance News, Indonesian President Joko Widodo stated that he has noticed signs of money laundering through cryptocurrency in 2021, amounting to $8.6 billion (IDR 139 trillion). In addition to cryptocurrencies and NFTs, the president emphasized the need to monitor other potential money laundering tools, including virtual assets, market activities, e-currencies, and AI-driven transactions. Mahendra Siregar, Chairman of the Financial Services Authority (OJK) Committee, responded to the President's directive, stating that when cryptocurrency regulation is transferred to the OJK next year, his agency will supervise these issues.

  • BTC breaks through $67,000

    Tthe market shows that BTC has broken through $67,000 and is now trading at $67,025.99, with a daily increase of 1.12%. The market is volatile, please be prepared for risk control.

  • Bitcoin spot ETF had a total net inflow of $31.6354 million yesterday, and the ETF net asset ratio reached 4.27%

    According to SoSoValue data, the total net inflow of Bitcoin spot ETF was $31.6354 million on April 23 (US Eastern Time).Grayscale ETF GBTC had a net outflow of $66.8838 million on April 23, and the historical net outflow of GBTC is $16.833 billion.The Bitcoin spot ETF with the highest net inflow on April 23 was BlackRock ETF IBIT, with a net inflow of $37.9233 million in a single day, and the historical total net inflow of IBIT has reached $15.479 billion.The second highest was the ARKB ETF from Ark Invest and 21Shares, with a net inflow of $33.282 million in a single day, and the historical total net inflow of ARKB has reached $2.267 billion.As of now, the total net asset value of Bitcoin spot ETF is $55.82 billion, and the ETF net asset ratio (the proportion of market value to the total market value of Bitcoin) is 4.27%, with a historical cumulative net inflow of $12.416 billion.

  • CZ announces Giggle Academy logo and design ideas

    CZ has released the Giggle Academy Logo and its design concept. He hopes that the logo can showcase youthfulness, fun, positive energy, and growth while continuing the "Binance tradition":

  • Ethereum liquidity re-staking agreement TVL exceeds US$9.4 billion, of which Renzo TVL increased by 12.34% in 7 days

    DeFiLlama data shows that the TVL of Ethereum's liquidity re-staking protocol has risen to $9.445 billion. The top five protocols ranked by TVL are: