The investors have been investing heavily in Cardano as they have been providing more support to the DJED stablecoin.
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DJED has Witnessed Great Input
It was just recently when the DJED stablecoin was launched. Just as the token was launched, the investors flocked to the stablecoin and started to invest heavily in the token.
Since then, the adoption rate of the token has surged tremendously. Until now, more than 27 million Cardano (ADA) tokens have been invested into the stablecoin by the users.
The data suggest that in just a matter of a day, the DJED token was backed tremendously by the users. So far, over 27 million ADA have been added as a backing for the DJED stablecoin.
Reserve Ration Sits at 600%
The data shows that the reserve ratio for the token has surged significantly. As per statistics, the reserve ratio for the token now stands at almost 600%.
This goes to suggest that every DJED stablecoin is backed by a total of six ADA. As the reserve ratio keeps on rising, the backing for the DJED stablecoin would keep on rising as well.
As for the issuance of the DJED stablecoins, the ADA value has been well over $10 million.
Teams Backing DJED Stablecoin
The djed stablecoin is not the effort of a single development team. Instead, the stablecoin has been developed by the joint efforts of Coti and IOG.
Coti is a layer 1 blockchain while IOG is the code maintainer for the Cardano network.
Backing Required by the Djed Stablecoin
According to the development teams behind the djed stablecoin, ADA will not be the only token backing the stablecoin.
In the future, the token will be backed by several other cryptocurrencies and digital assets. The teams have also communicated that they have to maintain certain collateral before the djed tokens can be issued.
The developers have confirmed that each stablecoin must be supported with collateral that is between 400% and 800% before it can be issued.
Once the above condition is met, only then the stablecoin would be issued to the users.
The Mechanism Provides Stability
The particular mechanism adopted by the development teams reportedly provides stability to the stablecoin.
Even though there is great market stress, the value of the djed stablecoin will not be impacted at all.
With the help of the particular mechanism, the developers aim to ensure that an incident like terraUSD does not repeat at all.
The terraUSD (UST) was a stablecoin that was powered by the Terra network team. The particular stablecoin was backed by an algorithm, which ended up failing, causing a great de-peg for the token.
As a result of the de-pegging, the trading price of the stablecoin ended up losing 99% of its value. The particular incident had taken place back in May 2022.
The token responsible for providing stability to the djed token is Shen. The particular token will be receiving rewards and there wouldn’t be any end to them.
The rewards will be given out as the users stake their tokens. The tokens that the users get to stake would be the ADA tokens. These tokens would be used for the purpose of minting the djed stablecoins.
This way, the developers want to increase the utility and the adoption rate for the djed stablecoin. This would in turn increase the adoption rate and utility of the Cardano ecosystem.
The utilization of the shen token will be increased as well as the utility of the applications currently based on the Cardano blockchain.
As of now, the teams have only released 1.7 million tokens for djed stablecoin that are currently in circulation. As for the shen tokens, there are 20 million tokens that are in circulation.