Cardano has no viable stablecoin solution and that’s not a good thing if you like to see your DeFi ecosystem grow. But there is light at the end of the tunnel! Coti is implying that Djed could launch next week and this would boost Cardano’s ecosystem and add a lot of valuable options for traders and long-term investors.

What is Djed and what can we expect from its launch?

The future is overcollateralized

Djed is a decentralized stablecoin and ever since Terra and UST blew up last year investors and regulators have become suspicious about these products. The solution that is widely adopted in the crypto industry is over-collateralization. Meaning that the value of the assets that are deposited to peg the value of the stablecoin have to be multiples.

In the case of Djed, that means that each stablecoin is secured by between 400% and 800% of the needed value to ensure its peg is maintained at all times. If you like to know more about how Djed exactly works, we have all information you’ll need in the linked article.

Of course, there is no guarantee that the peg will be stable at all times, but most experts believe that an overcollateralized stablecoin is the best solution that can be offered. The next best solution would require a centralized entity that holds an equal amount of cash for each stablecoin that is emitted. As we all know this is not easy to achieve and even centralized stablecoins are often secured with other assets such as treasury bills.

Cardano ecosystem is preparing

According to Coti, the ecosystem is already signaling its readiness to adopt Djed. Decentralized application such as MuesliSwap has announced their full support. They promise that once Djed is launched it will be integrated into their marketplaces and products.

This is an exciting development for Cardano even though it is not clear when the stablecoin is going to launch exactly. Since Cardano has a long history of postponing releases and launch dates, it might be a good idea not to get too excited until the launch is happening.

Stablecoins have become increasingly important in crypto. They allow to denominate and trade assets, goods as well as services in dollars or euros, diversification of portfolios, and lending and borrowing money. This trend is also reflected by their market cap. Three of the top 10 assets are stablecoins, which hints that Djed as well as Cardano could see some growth by starting their version of a stablecoin.