COTI introduced a new algorithm, stablecoin, this weekend. Cardano gets the new stablecoin called Djed. The announcement was made to expand decentralized finance (DeFi) on the network.
The stablecoin called Djed was announced at a Cardano submit on 26th September by the IOHK Founder Charles Hoskinson.
COTI, the official enterprise-grade fintech platform, will be the official issuer of Djed. The new stablecoin will use the new Cardano intelligent contracts to guarantee price stability. It will also use this algorithm design to provide an instrument for DeFi transactions.
The primary purpose for designing the stablecoin was to pay transaction fees on Cardano, thereby evading the ‘volatile and expensive gas fees’. The Djed will also make the transaction cost ‘more predictable’.
As per Djed’s research paper issued earlier, it has a distinct stablecoin protocol. The stablecoin operates by keeping a reserve of base coins while creating and burning various other stable assets and reserve coins. The protocol will act like an independent bank that purchases and sells stablecoins for a price in a range fixed to a target price.
This news came only a while after COTI partnered with Cardano’s stablecoin hub, Ardana, to bring DeFi payments to AdaPay.