Coti and Cardano are partnering to launch a DeFi stablecoin on the Cardano blockchain, the new stablecoin will provide a mechanism for decentralized finance (DeFi) activities while avoiding transaction costs.
Cardano founder Charles Hoskinson and Coti CEO Shahaf Bar-Geffen announced Sunday at the Cardano Summit that Coti, Cardano’s payment gateway provider, will be the official issuer of Djed, a new DeFi-focused stablecoin for the Cardano network.
To provide price stability and provide an instrument for DeFi transactions, the new stablecoin will be built on an algorithmic design employing smart contracts.
The stablecoin will be used to pay transaction fees on the Cardano network, avoiding “volatile and excessive gas expenses” and making transaction costs “more predictable.”
Djed’s stablecoin protocol, according to a research paper published in August, will act as an “autonomous bank that buys and sells stablecoins at a price in a range that is tethered to a target price.”
The stablecoin will function by minting and burning various stable assets and reserve coins while keeping a reserve of base currencies.
The Djed stablecoin, according to Hoskinson, might be a game-changer in the crypto business since it appeals to an “entire new audience at a time when the industry is already undergoing exponential growth.”
Coti recently joined with Ardana, Cardano’s stablecoin hub, to enable decentralized stablecoin payments to AdaPay, a Cardano (ADA) payment gateway that supports over 30 fiat currencies.