A new stablecoin is coming up on the Cardano blockchain to offer a tool for decentralized finance (DeFi) operations and avoid transaction fees.
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Cardano’s payment gateway provider, Coti, will be the official issuer of Djed, a new DeFi-based stablecoin for the Cardano Network, as announced on Sunday by Cardano founder Charles Hoskinson and Coti CEO Shahaf Bar-Geffen.
The new stablecoin will be built on an algorithmic design utilizing smart contracts to maintain price stability and providing a tool for DeFi transactions.
The stablecoin is structured for paying transaction fees on the Cardano network to avoid “volatile and exorbitant gas fees” and make transaction costs “more predictable.”
Djed’s research paper published in August noted that its stablecoin protocol will work like an “autonomous bank that buys and sells stablecoins for a price in a range that is pegged to a target price.”
The stablecoin will operate by maintaining a reserve of base coins while minting and burning numerous other stable assets and reserve coins.