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About Djed
-
What is Djed (DJED)?
: First over-collateralized ADA-backed stablecoin contract on Cardano network. -
Founders:
IOG team (Joachim Zahnentferner, Dmytro Kaidalov, Jean-Frédéric Etienne, Javier Roberto Diaz) powered by Coti. -
Unique features:
- Formally verified stablecoin protocol.
- Peg upper and lower bound maintenance.
- Peg robustness during market crashes.
- No insolvency.
- No bank runs.
- Monotonically increasing equity per reserve
About Djed: A Stablecoin Solution
Introducing Djed (DJED): A Stablecoin Pioneer
Djed represents the pioneering over-collateralized ADA-backed stablecoin contract on the Cardano network. It functions by maintaining a reserve of base coins (ADA), and dynamically minting and burning stablecoins and reserve coins. The contract ensures the stablecoin’s peg to a target price by engaging in strategic buying and selling of stablecoins, leveraging the reserve, and accruing fees, which are subsequently accumulated in the reserve. Ultimately, the beneficiaries of this revenue stream are the holders of reserve coins, who augment the reserve with funds while assuming the risk of price volatility.
The Visionaries Behind Djed: Meet the Founders
The Djed research paper was authored and developed by the esteemed IOG team, comprising Joachim Zahnentferner, Dmytro Kaidalov, Jean-Frédéric Etienne, and Javier Roberto Diaz, and is proudly powered by Coti.
Unveiling the Unparalleled Attributes of Djed
DJED pioneers the concept of a formally verified stablecoin protocol, leveraging formal methods to ensure the design and stability properties of Djed. By employing rigorous formal techniques, the protocol’s properties are mathematically proven through theorems, guaranteeing an unprecedented level of reliability and trustworthiness.
*Peg upper and lower bound maintenance: the price is capped within a predetermined range, thereby preventing it from exceeding or falling below the set price. Within the normal reserve ratio range, transactions are unrestricted, and users lack motivation to trade stablecoins outside the peg range in a secondary market.
In the event of a market downturn, the peg exhibits remarkable resilience, remaining stable up to a predetermined limit, which is directly correlated to the reserve ratio, even when the value of the base coin experiences a precipitous decline.
*No insolvency risk: since no traditional banking institution is involved, there is no risk of contractual default or bankruptcy.
In the absence of bank runs, all users are treated with impartiality and compensated fairly, thereby eliminating any provable incentive for users to hastily redeem their stablecoins.
In a paradigm of perpetually appreciating value, the reserve surplus per reserve coin is assured to ascend as users engage with the contract, thereby ensuring a profit for reserve coin holders under specified circumstances.
Notably, our system ensures *no reserve draining*, which means that, under any circumstances, it is impossible for a malicious actor to orchestrate a series of actions that would result in the theft of reserves from the bank.
*Bounded dilution: a safeguard is in place, ensuring that the dilution of reserve coin holders’ profits, resulting from the issuance of additional reserve coins, is capped and thereby limited.
The Djed Peg: A Testament to Unwavering Stability
The Djed stability mechanism is anchored to a collateral ratio ranging from 400% to 800% for both $Djed and $Shen, ensuring that fluctuations in ADA prices are effectively offset by Shen, thereby covering any shortfalls and guaranteeing the maintenance of the requisite collateralization rate.
The ADA reserve pool operates independently of market makers, instead relying on users who mint the $Shen reserve coin and contribute ADA to the pool, thereby introducing a decentralized element to the $Djed mechanism. Furthermore, $Shen holders are motivated to provide liquidity in exchange for fees.
As $Djed can be over-collateralized (up to 8x), the risk of $Djed deviating from its peg decreases significantly. This means that for every 1 $Djed minted, there are 3–7 dollars’ worth of $ADA in the reserve pool, providing a substantial collateral buffer. If the ratio falls below 400%, users will not be able to mint $Djed, and $Shen holders won’t be able to burn their $Shen. Thus, in the event of a market downturn, a security blanket is in place for $Djed holders, ensuring its long-term sustainability. The minting of new $Shen is also closely monitored to maintain stabilized balances and guarantee that there will always be sufficient ADA in the pool to provide a dollar-equivalent value to the $Djed when burning it.
Where to Acquire Djed (DJED): A Comprehensive Guide
Direct minting of DJED and SHEN is possible both on the platform itself and across various top-tier decentralized exchanges (DEXs) on the Cardano network.
New to the world of cryptocurrency? Discover our straightforward guide to purchasing Bitcoin and other digital assets with ease.
Associated Resources:
Delve into the world of Djed, a stablecoin designed to provide a hedge against market volatility.
Delve into the intricacies of Djed and Shen mechanisms
here
.
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