The algorithmic stablecoin of the Cardano blockchain is now closer to getting into life with its upcoming testnet launch.
Djed is an algorithmic concept-based stablecoin of the Cardano project, which was proposed by Cardano founder Charles Hoskinson in Q4 2021. Charles explained the mathematical concept of the working principle of Djed stablecoin and confirmed that Djed will be able to remain pegged to a $1 value under every critical situation.
On 3 June, Milkomeda, a developer team for developers of leading crypto blockchain Networks, announced that Djed stable coin will be available to test on testnet in the next week.
Milkomeda also confirmed that the team doesn’t hold any kind of official relationship with the official release of Djed but it will make this thing available on testnet to allow people to test the prototype of the initial phase of Cardano’ Stablecoin.
“We don’t have any relationship with the official release of Djed. We read the whitepaper and implemented the protocol following it.”
Here Milkomeda is an Ethereum Virtual Machine (EVM) supported sidechain, which allows developers to achieve cross-chain interoperability between Cardano and Ethereum networks easily.
Initially, for the same, the Milkomeda foundation announced in March of this year, to allow the transfer of assets between Cardano and Ethereum, which also includes Dapps on the Cardano blockchain.
Djed: Algorithmic stablecoin
In May 2022, the whole crypto industry saw how Terra network’s two native tokens Luna & UST stable coin touched the ground price.
Both the coins were connected to maintain the price of the UST coin at a $1 value but under the high-pressure sell situation, UST faced significant correction.
The current price of a UST coin is $0.016, Which is near zero from its actual $1 pegged value.
The main reason behind the correction in the value of UST & Luna was the algorithmic concept. After the downfall in UST value, many other algorithm-based stablecoins faced downfall because of fear situation.
Djed is also one of the algorithmic concept-based stablecoin, which will enter the crypto industry in near future. After the Terra ecosystem collapsed, many experts started to target Cardano’ Djed stable coin.
In a response tweet, Cardano’s founder said that the stability of Djed’s stable coin will be maintained via algorithm but Djed stablecoin will always remain over pegged by actual safe assets.