Cardano moves closer to Stablecoin launch, ADA holders could benefit if…
- Cardano will launch its algorithmic stablecoin Djed on January 2023
- Cardano’s TVL and ADA’s price has been on a decline in recent weeks
At the Cardano Summit on 21 November, Cardano announced that it would increase the scope of the network’s offerings by issuing a stablecoin. This would add Cardano to the growing number of networks that have introduced their own stablecoins in a bid to corner the market in this growing sector of the cryptocurrency industry.
Read Cardano (ADA) Price Prediction 2022-2023
Cardano announces Djed launch month
The Djed stablecoin will be an over-collateralized algorithmic stablecoin backed by a reserve of Bitcoin. If all goes well with the audit and the stress tests, Djed will see its mainnet launch on January 2023.
— Djed Stablecoin (@DjedStablecoin) November 21, 2022
The developers claimed that Djed will be supported by Cardano’s native coin ADA and SHEN, and that it will be pegged to the U.S. dollar.
Users who contribute liquidity in the form of Djed will be rewarded by the algorithmic stablecoin’s integrated partners and Decentralized Exchanges (DEXes). The developers of the Djed smart contract want to add ADA liquidity slowly and steadily to promote long-term, sustainable growth.
Cardano TVL declines as dev activity ramps up
The introduction of the stablecoin may have positive repercussions for Cardano, including the enhancement of decentralized finance (DeFi) on the network. Data from DefiLlama showed that Cardano’s total value locked (TVL) had been going down recently. Additionally, even at its peak, the platform was way behind its contemporaries.
At the time of writing, Cardano’s TVL was at $50.99 million, with a peak of a little over $300 million observed. The successful release and implementation of its own stablecoin could further stimulate the development of TVL and participation in DeFi.
After a protracted wait, the recent Vasil Upgrade went operational on 22 September. Santiment’s development activity indicators revealed that additional features may still be in the works. The dev activity measure had been on the rise since the end of October and stood at 106 despite decreasing, at the time of writing.
ADA trends down
ADA did not seem to be doing too well, based on the daily timeframe price movement. The asset had been on the decline, quickly giving up any gains it had made in recent days. It hasn’t been able to recapture that level since it tested the $0.4 area in late October and early November.
As can be seen from the price chart, ADA has been in decline for the past few days. It has also been unable to establish a new support line. Except for a few minor surges that were seen, the trade volume had been rather quiet. The asset’s current bearish trend was confirmed by the Relative Strength index line.
At the top of the price moves, the 50 (yellow line) and 200 (blue line) Moving Averages were visible, and they effectively functioned as ADA’s resistance. The placement of the MAs also revealed the unfavorable trend that ADA was going through.
Respite for ADA?
Even if ADA’s pricing has seen little movement recently, the development activity and latest announcement suggest that could change. While there is a broad bear trend in the cryptocurrency market at the moment, it is possible that projects like Cardano, which are still building despite the trend, might receive more popularity once the trend reverses.