DeFi Behind the Djed Stablecoin Announces Hard Fork

Djed, a new overcollateralized stablecoin to be launched next month.
Could support the creation of a Private Payment Network (PPN).
The deposit fee will be decreased by 50%, and withdrawal fees will be dynamic.

Cardano ADA is all set to revive itself and fight the recent after-effects of crypto winter, Terra ecosystem collapse and FTX collapse. The Decentralized Finance (DeFi) protocol behind Cardano’s new launch of stablecoin Djed talks about successfully updating their network.

Per the COTI Network, the scalable layer-1, which is behind ADA’s upcoming Djed stablecoin, is being updated and transitioning the blockchain towards a multi-token network, which could support creating a Private Payment Network (PPN). The blog further reads,

“The launch of the MultiDAG 2.0 protocol heralds the full transition of COTI from a single currency infrastructure to a multi-token network…

We believe COTI is uniquely positioned to serve enterprises, enabling them to launch their Private Payment Network (PPN), which includes the issuance of CMD [COTI MultiDAG] branded payment tokens, issuance of CMD branded loyalty tokens, and more.”

COTI also announced the adjustment to the user fees. Their deposit fees will be decreased by 50%, and the withdrawal fees will move to a dynamic range soon; till then, the fee will remain as it is.

The other fees include a fixed multiplayer charge which will be applied only to multiplied deposits, and a 1-5% liquidation fee, which is only applicable to multiplied deposits.

This new fee model will be in effect from January 15, 2022.

According to COTI, this transition would ignite a widespread adoption of crypto assets as payments for goods and services.

Djed is the first over-collateralized crypto-backed algorithm stable coin contract on the Cardano network. It operates by keeping base coins ADA as reserves, minting and burning stable and reserve coins. The peg to a stable coin’s target is maintained by buying and selling stable coins, using reserves, and charging fees, accumulating the reserve.

Djed’s research paper was written and developed by Joachim Zahnentferner, Jean-Fredericc Etienne, Dmytro Kaidalov, and Javier Roberti Diaz, also known as team IOG, and was powered by COTI.

Effect on the crypto industry

Though the recent incidents have shaken the industry’s foundations, many players are still trying everything they can to bring some hope back to the industry. Cardano’s DeFi blockchains, Djed, which will be launched next month, can be considered a positive step for the company.

On paper, the technicalities look promising, and we can hope that the company releasing it should have taken lessons from the factors and reasons that caused massive failures of some of the biggest names in the industry.

Although it is too early to say that it could be a game changer, let us keep our fingers crossed, as even a small leaf sprouting in the spring can soon take over the whole forest.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing