Djed issuance that began on Tuesday has realized reserve backing exceeding 600%. Scrutiny of the data shows over-collateralization of the Cardano-based stablecoin with 29.7 million ADA tokens backing it since issuance.
At press time, Djed’s reserve ratio averages 640%, implying that each stablecoin’s backing by ADA exceeds six times its value. The value of the reserve backing exceeds $10 million.
Hyped Djed Stablecoin Project
The much-hyped djed stablecoin is a joint project of IOG and Coti. Coti is a specialist in layer 1 blockchain, while IOG is an experienced Cardano code maintainer.
The firm had earlier indicated that Djed must attain backing from other tokens ranging from 400% to 800%in its reserve base before its issuance to the users.
The overcollateralization mechanism is set to facilitate the stability of the Djed value, thereby weathering the market stress. The approach is necessitated by the need to avoid the recurrence of terraUSD when the Luna-linked stablecoin tumbled by 99% in May 2022.
Shen Reaping Additional Rewards
Shen is set to reap additional rewards where the Cardano’s ADA holders stake when minting the Djed stablecoins. The rewards arrangement to the holders of the reserve tokens is projected to improve liquidity in the ecosystem. The process could stimulate demand for Shen amongst users. Rising prices are likely to result as the Djed stablecoin realizes increased integration within other Cardano-based applications adding to the utility.
By Sunday morning, the Djed circulating supply hit 1.86 million tokens. The Shen reserve coin is estimated at $23.17 million. Cardano community forecast that Djed tokens, along with the rewards from the DEXs, would attract liquidity.
Its accomplishment will improve liquidity, while the overcollateralized mechanism would trigger investors’ interest. Such an outcome would revolutionize Cardano’s $91 million DeFi market.
Incorporating Djed Stablecoin in Cardano System
Meanwhile, DeFi projects within the Cardano system are set to incorporate the Djed stablecoins. In particular, the DeFi-based project Fluid announced successful integration with Djed stablecoins. However, its use is limited to improving liquidity against the loans.
Also, Cardano DeFi exchange platform MuesliSwap renewed targets for the annualized yields ranging from 10-20% Djed users.
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