Will Djed make the most of stablecoin turmoil? Here’s what the metrics say
- Djed didn’t lose its USD peg during the recent turmoil in the stablecoin market,
- Djed’s TVL saw gains of 17% since the USDC depegging saga,
Cardano’s [ADA] stablecoin Djed, which launched earlier this year, may soon expand to other layer-1 networks like BNB Chain [BNB] and Ethereum [ETH].
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The CEO of COTI, the firm which developed Djed in collaboration with Input Output HK (IOHK), said that the expansion was always part of the project scope but they will work towards it with greater focus.
The CEO added that they received several requests from non-Cardano DeFi protocols to have the stablecoin launched on their blockchains.
"Djed will be on other chains as well. Obviously on Ethereum and Binance Smart Chain just to name a few…because defi ecosystems need a stablecoin that is stable and reliable.@shahafbg $Djed $Shen $Ada $Coti @COTInetwork pic.twitter.com/eS8j3bxHNJ
— 𓊽 Djed 𓊽 (@DjedStablecoin) March 20, 2023
Chance to thrive?
The recent developments in the stablecoin ecosystem put the focus towards entities which remained reliable throughout the chaos. One of them was Djed, which didn’t lose its USD peg.
Infact at one point in time, it traded at a premium against the USD, per date from CoinMarketCap. During periods of high demand, stablecoins tend to go above their pegged value.
On the other hand, coins like USD Coin [USDC], DAI, and FRAX lost their dollar peg during the turmoil.
Djed had a 487% reserve ratio, implying that each Djed was backed by more than four times its value in ADA. There were more than 33 million ADA coins in reserves.
The over-collateralization mechanism was meant to provide protection to Djed against fluctuating market conditions, similar to the one which brought about a downfall of TerraClassicUSD [USTC] last year.
However, it should be noted that Djed was still a newcomer on the horizon. Its trading volume was a fraction of that of other established coins like USDC and DAI, which played a big part in making it immune to macroeconomic triggers.
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Djed’s contribution to ADA
Djed’s total value locked (TVL) saw gains of 17% since the USDC depegging saga, data from DeFiLlama revealed. At the time of writing, it accounted for 8% of the total TVL on the Cardano blockchain.
At press time, ADA traded at $0.3449, a marginal increase of 0.15% from the previous day. Bullish sentiments for the coin were back as the number of long positions vis-à-vis the short positions increased.