Cardano to enable new DeFi stablecoin with Coti
A new stablecoin is arriving on the Cardano blockchain to provide a tool for decentralized finance (DeFi) operations and avoid transaction fees.
Cardano’s payment gateway provider Coti will be the official issuer of Djed, a new DeFi-focused stablecoin for the Cardano network, Cardano founder Charles Hoskinson and Coti CEO Shahaf Bar-Geffen announced Sept. 26 at the Cardano Summit.
The new stablecoin will be based on algorithmic design, using smart contracts to ensure price stability and providing an instrument for DeFi transactions. The stablecoin is designed for paying transaction fees on the Cardano network in order to avoid “volatile and exorbitant gas fees” and make transaction costs “more predictable.”
According to the Djed’s research paper released in August, its stablecoin protocol will behave 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 various other stable assets and reserve coins.
Related: Cardano launches smart contracts after successful hard fork
According to Hoskinson, the Djed stablecoin could be a game-changer in the crypto industry as it appeals to an “entirely new audience at a time when the industry is already experiencing astronomical growth.”
The news comes shortly after Coti partnered with Cardano’s stablecoin hub Ardana to bring decentralized stablecoin payments to AdaPay, a Cardano (ADA) payment gateway supporting over 30 fiat currencies.