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Cardano is launching a new algorithmic stablecoin in 2023

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Proof-of-stake blockchain platform Cardano has partnered with COTI, a DAG-based Layer 1 protocol, to launch what it refers to as an over-the-top algorithmic stablecoin. The project said in an announcement submitted to Cointelegraph that the stablecoin will be backed by over collateral in the form of cryptocurrency stored in reserves.

According to the release, JED is scheduled to go live on the mainnet in January 2023, waiting for a successful review and a series of rigorous stress tests. According to the developers, Djed will be pegged to the US dollar, backed by Cardano ($ADA), and will use $SHEN as its backup currency.

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The algorithmic stablecoin will be integrated with select partners and decentralized exchanges (DEXs), who will reward users for providing liquidity with Djed. In an effort to grow at a healthy sustainable pace, the developers plan to adopt a gradual and slow approach to providing USD ADA liquidity for the JED smart contract.

COTI CEO Shahaf Bar Geffen shared the official announcement at the Cardano summit:

“Recent market events have proven once again that we need a safe haven from volatility, and JD will serve as the safe haven in the Cardano network. Not only do we need a stablecoin, but we need a decentralized currency, with chain proof of reserves.”

Related: Cardano Price Chart Draws ‘Burj Khalifa’ With 7-Month Losing Streak – More Losses Ahead?

Despite Cardano’s lackluster price action, the blockchain continues to build and innovate within the ecosystem. on September 22, Cardano’s long-awaited Vasil upgrade has finally been released. The hard forks are designed to help improve the ecosystem’s scalability and public transaction throughput, as well as the development of Cardano Decentralized Applications (DApps) Development capacity. At the time of publication, Cardano is trading at $0.30.