Cardano’s new stablecoin, Djed will be issued by COTI
At the Cardano Summit 2021, Input Output HK (IOHK) announced a partnership with COTI, as Cardano’s stablecoin platform. Moving forward, the COTI platform will be the official issuer of Djed, the network’s stablecoin.
Back in July, IOHK CEO Charles Hoskinson had shared the stablecoin design for Decentralized Finance [DeFi] transactions. Now, it plans to use COTI’s Trustchain-based system, which is a machine learning-based consensus algorithm.
In the press release, the COTI development team stated that stablecoins are a “killer app.”
Shahaf Bar-Geffen, chief executive of COTI Group, said
“I believe that adding the Djed stablecoin to the Cardano blockchain will significantly improve how transactions are settled on the platform.”
Djed will operate by maintaining a reserve of base coins. And, it will be used for payments on Cardano by keeping “volatile and exorbitant gas fees” in check. Hoskinson further stated that Djed stablecoin could be a game-changer in the crypto space when the industry is already experiencing astronomical growth. He said,
“Djed shares our commitment to formal verification, proving a robust method of combating price volatility of crypto markets.”
Djed’s white paper was released back in August, equating its function to that of “an autonomous bank.” While the stablecoin will be pegged to a fiat currency (USD), it will also be governed by a smart contract algorithm. In turn, it will make transaction costs “more predictable.”
Recently, Cardano’s stablecoin hub Ardana had also announced a collaboration with COTI. Additionally, AdaPay is a joint project between COTI and IOHK to enable ADA-to-fiat transactions.
Meanwhile, Cardano has made several other announcements at the summit, including a partnership with Chainlink. The collaboration to build smart contracts for Cardano DeFi apps with oracle integration.