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About Shen
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Reserve Coins:
Digital tokens maintaining stablecoin peg, providing liquidity, and earning transaction fees. -
Shen (SHEN):
Djed’s Reserve Coin, symbolizing royalty, symmetry, infinity, eternity, protection, and completeness. -
Djed (DJED):
Over-collateralized crypto-backed algorithmic stablecoin on Cardano network. -
Founders:
IOG team (Joachim Zahnentferner, Dmytro Kaidalov, Jean-Frédéric Etienne, Javier Roberto Diaz) powered by Coti. -
Unique Features:
About Shen
Shen is a decentralized, community-driven cryptocurrency ecosystem that empowers individuals to take control of their digital assets.
Understanding Reserve Coins: A Comprehensive Overview
In essence, Reserve Coins are digital tokens that underpin the algorithmic stability of stablecoins. By engaging in Reserve Coin trading, users can actively contribute to the stablecoin mechanism, thereby providing the necessary liquidity to maintain an optimal peg ratio. By leveraging a reserve, base fees can be imposed, collected, and aggregated for transactions facilitated by the underlying stablecoin. As a token of appreciation, Reserve Coin holders receive a proportionate share of this transaction pool, incentivizing their participation in maintaining the stablecoin’s peg ratio. Prior to the launch of Djed, we will be introducing a Reserve Coin, specifically designed to ensure Djed’s peg and liquidity stability.
Introducing Shen (SHEN): A Comprehensive Overview
Building upon the ancient Egyptian motif, we have chosen the name Shen for Djed’s Reserve Coin. The Shen, a symbol of regality and symmetry, boasts a profound connection to infinity, eternity, protection, and completeness, as embodied by its circular form.
Through our collaborative brainstorming efforts, we discovered that this name aptly encapsulates the inherent characteristics and properties of Djed’s Reserve Coin.
Through buying and selling Shen, users play a pivotal role in maintaining Djed’s stable USD currency peg, while simultaneously earning a proportion of transaction fees accrued in the reserve pool. Furthermore, as the Reserve Coin is a tradable asset, holders can capitalize on short-to-mid-term price fluctuations, thereby reaping additional benefits.
Introducing Djed (DJED): A Stablecoin Pioneer
Djed represents a pioneering achievement in the realm of cryptocurrency, being the inaugural over-collateralized crypto-backed algorithmic stablecoin contract to operate on the Cardano network. Its modus operandi involves maintaining a reserve of base coins (ADA), which facilitates the minting and burning of stablecoins and reserve coins. The contract ensures the stablecoins’ peg to a target price by engaging in the strategic buying and selling of stablecoins, leveraging the reserve, and accruing fees that subsequently augment the reserve. Ultimately, the beneficiaries of this revenue stream are the holders of reserve coins, who bolster the reserve with funds while assuming the risks associated with price fluctuations.
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, boasting a robust design and stability attributes that owe a debt of gratitude to the incorporation of formal methods in its programming process. By leveraging formal techniques, the protocol’s properties are rigorously proven through mathematical theorems, ensuring an unprecedented level of reliability and trustworthiness.
The peg upper and lower bound maintenance ensures that the price remains within the predetermined range, neither exceeding nor falling short of the set price. Within the normal reserve ratio range, purchases and sales operate unrestricted, and users lack motivation to trade stablecoins outside the peg range in secondary markets.
Robust peg resilience amidst market turmoil: up to a predetermined limit, contingent upon the reserve ratio, the peg remains steadfast even in the face of precipitous declines in the base coin’s value.
*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 perpetual growth, the equity per reserve coin exhibits a monotonically increasing trajectory, ensuring that the reserve surplus per reserve coin consistently appreciates as users engage with the contract, thereby guaranteeing a profit for reserve coin holders under specified conditions.
Notably, our system ensures *no reserve draining*, which means that, under any circumstances, it is impossible for a malicious entity 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 profit of reserve coin holders is protected from excessive dilution, thereby capping the potential negative impact of additional reserve coin issuances.
The Djed Peg: A Testament to Unwavering Stability
Djed’s algorithm is predicated on a collateral ratio ranging from 400% to 800% for both $Djed and $Shen. Notably, Shen serves as a safeguard, offsetting ADA price fluctuations, thereby covering potential shortfalls and ensuring 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 balanced reserves and ensure 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 intricacies of the Djed algorithmic stablecoin and discover its underlying mechanics.
Delve into the intricacies of Djed and Shen mechanisms
here
.
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