Data reveals that less than a day after launch, the overcollateralized Djed (DJED) stablecoin based on Cardano has garnered over 27 million Cardano (ADA) tokens as Reserve backing.
Djed currently has a reserve ratio of about 600%, which means that each djed is backed by six times its value in ADA.
The ADA locked for issuing djed is valued at about $10 million at the current pricing.
IOG, the maintainer of the Cardano code, and Coti, a layer 1 blockchain, have collaborated to create the eagerly awaited djed stablecoin.
Before being released to a user, Djed will require between 400% and 800% in collateral value to be provided. Other tokens will also back it.
Due to this overcollateralized approach, djed’s value could hold steadily during market stress, which would also avoid a repeat of the disastrous May price drop of terraUSD, the infamous stablecoin related to luna.
When holders of Cardano’s ADA cryptocurrency stake their tokens to produce djed stablecoins, which might increase liquidity for the nascent ecosystem, Shen, the reserve token intended to support Djed’s stability, would benefit from more incentives.
As a result of djed’s integration with more Cardano-based applications, which increases its utility, there may be an increase in user demand for SHEN and, as a result, a spike in prices in the coming weeks.
Djed has a circulation of 1.7 million tokens as of Wednesday morning, whereas SHEN has a supply of 20 million tokens priced at 38 cents each.
Due to their overcollaterized process, the djed coins are anticipated to draw liquidity and investor interest, which might be advantageous for Cardano’s $91 million decentralized financing (DeFi) market.
Djed stablecoins have already been incorporated into some Cardano DeFi initiatives, such as Fluid, providing liquidity against loans.
MuesliSwap, a Cardano DeFi exchange, stated last week that it aimed to provide djed consumers with annualized payouts of 10% to 25%.
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