Cardano is gaining momentum as the launch of the DZ stablecoin nears. ADA price has not yet made a major move, but it may happen soon.
The hype is building up on the latest project launching on the Cardano ecosystem. Djed is a crypto-backed, hyper-collateralized algorithmic stablecoin backed by ADA. It is developed by Cardano backers IOG and powered by Coti, a layer-1 scalable enterprise network.
Djed is planned for release this month. However, no date has been decided yet.
Djed is entering a crowded stablecoin market that already accounts for 13% of the entire crypto market cap and almost a third of the top ten assets.
Cardano DeFi Up 50%
On the surface, Djed uses a similar formula to existing stablecoins such as Frax. It uses collateral from ADA and a reserve coin called the SHEN, minted and burned to preserve Z’s dollar peg.
ADA is sent to the Djed smart contract in exchange for Djed. Furthermore, SHEN acts as a counterbalance when the price of ADA fluctuates. Unlike Frax, which is partially collateralized with USDC and FXS, Djed will be over-collateralized with ADA. According to a recent Coty blog post:
“Djed is collateralized by more than 400% – 800%, which means that its underlying value is 4 to 8 times higher than the total amount of Djed.”
The launch will boost the total value locked in the Cardano ecosystem and potentially ADA price.
The Cardano DeFi TVL has already been broken this year. It currently sits at just under $100 million, after a 50% increase since the beginning of 2023. According to DeFiLlama, Cardano DeFi TVL is now at its highest level since early October.
Ecosystem dApp activity is also on the rise. Currently the leading DApp on Cardano is jpg.store NFT Marketplace, followed by Minswap DEX.
ADA Price Outlook
ADA price hasn’t changed much in the past few days, hovering around $0.35. However, they have registered a whopping 40% gain in the last fortnight.
Beyond that, ADA has a lot of potential. Cardano coin is currently down 88.6% from its September 2021 all-time high of $3.09.
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