$ADA: COTI’s “Overcollateralized” Stablecoin $DJED Goes Live on Mainnet

On Tuesday (31 January 2023), the COTI team made the announcement that many in the Cardano community had long been waiting to hear.

Djed ($DJED) is a Cardano-powered stablecoin developed by IOG and issued by FinTech startup COTI Group.

Effective September 26, 2021, second day of the Cardano 2021 Summit, IO Global, blockchain technology company in charge of Cardano R&D ($ADA), FinTech startup company COTI Group, unveiled Djed, has formally checked crypto-backed pegged algorithmic stablecoin for Cardano which was conceived by the first and is published by the second.

On the same day, COTI published a blog post (titled: “Why Being the Issuer of Djed, Cardano’s Official Stablecoin, is a Game Changer for COTI”), which had this to say:

“Djed isn’t just a stablecoin built upon Cardano’s chain, it is also designed to become the ultimate coin with which Cardano’s entire network transaction fees will be paid. It makes more sense for a chain to have predictability in how much transaction costs, rather than have volatile gas fees, and Djed will do just that…

“While our main goal is to issue stablecoin for enterprises and merchants on COTI’s Trustchain, we also plan on being involved with stablecoin issued on other chains. Our long relationship with Cardano, which led to an investment in equities through their ecosystem fund, created the opportunity for COTI to become the official issuer of Djed, the stabilizer of Cardano.

“As part of the role of COTI, COTI is responsible for the development of the user interface system and will ensure the integration between users of intelligent contracts for stability. Coti will work in partnership with companies, developers and other parties that want to hit both the stablecoin and the spare part used in the connection algorithm.

“$DJED and its reserve coin’s mint and burn fees will be charged in $ADA and will be entered into the equity pool of the protocol. Reserve coin holders receive a portion of this fund as an incentive to participate in the maintenance of the DDED anchor ratio.

“As a service provider, users will be subject to an operating charge that will be paid in Canadian dollars and deducted from the initial deposit and operating costs. It is our intention to convert this $ada fee into $coti coins, first by buying $coti directly from the marketplace and supporting the $coti request, and then deposit such a dollar into the treasury of Coti, for the benefit of the people who use the treasury. This is a true win-win situation and an excellent opportunity for the cotton ecosystem.“

Here is some information from Djed’s website that explains how Djed’s stability mechanism works:

“$DJED is an overcollateralized stablecoin that uses exogenous collateral ($ADA) to ensure stability. The protocol is supported by an over-collateralisation of 400-800% and is secured by its spare part, $SHEN.

“The stability of $DJED is based on over-teaming, which eliminates the need to trust a governance token as shown in algorithmic stablecoins. The platform is also fully decentralized and community-focused, enabling open source development and community participation in the striking and incineration of $DJED and $SHEN.“

Anyway, at 12:02 p.m. UTC on 31 January 2023, the COTI team announced that Djed had gone live on the Cardano mainnet:

Several decentralized scholarships (DEXes) fed by Cardano, like MuesliSwap, Minswap and WingRiders, as well as several large scholarships, like Bitrue, have already promised to support Djed: