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2 Popular Crypto Projects Set to Launch their Algorithmic Stablecoins



2 Popular Crypto Projects Set to Launch their Algorithmic Stablecoins

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As the need for decentralized algorithmic stablecoins sees an upsurge, the teams at Cardano (ADA) and IOST are gearing up towards the release of their respective versions of algorithmic stablecoins. However, the IOST foundation is yet to unveil the token’s name and launch date.  Meanwhile, Cardano’s Djed is now live on the public testnet, with a public mainnet planned for June 2022. 

Djed Goes Live on Public Testnet

Per the announcement, Cardano, in collaboration with COTI has released the public Testnet version of Djed. This is to enable the founding team and the community to test the main functionalities of the protocol using test tokens.

It is also believed that the testnet phase will hand users an opportunity to understand the dynamics of the protocol in a risk-free manner. 

Also, the announcement added that the following decentralized exchanges – SundaeSwap, Minswap, and WingRiders have created test pools on their platforms for the testing of Djed. 

Being a testnet release, the team believes that some technical concerns may arise. To achieve a perfect mainnet release in June 2022, the team encourages users to test all aspects of the testnet release and drop feedback accordingly. 

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Djed Algorithmic Stablecoin

About Djed

Djed is a decentralized algorithmic stablecoin built on Cardano, developed by the Input Output Global (IOG), and issued by COTI. There are two versions of Djed – Minimal and Extended Djed. 

Djed is termed algorithmic because it uses smart contracts to ensure its price stability. Similar to other versions of crypto-backed stablecoins, it behaves like an autonomous bank that buys and sells stablecoins. 

Also, it is said to be crypto-backed in the sense that it has a reserve of volatile base coins. In this case, the reserve coin is called Shen. 

Noteworthy is that the Djed algorithmic stablecoin project began in August 2021. This was in a bid to combat the challenges posed by fiat-backed stablecoins.

To achieve the project, the Input Output Global (IOG) teamed up with Emurgo, Ergo blockchain, and COTI.

Note that the IOG is the body tasked with the development of the Cardano blockchain. While COTI is the official issuer of Djed. 

Per another report, the IOG, Ergo, and Emurgo teams have been working on the implementation of the Djed algorithmic stablecoin contract earlier in 2021 to test different models. Notably, SigmaUSD (on Ergo) was the first implementation of a Djed stablecoin contract. Also, Djed has been implemented by the IOG team in Solidity. 

IOST Foundation Set To Launch Algorithmic Stablecoins

IOST and Algorithmic Stablecoins

In a recent statement, the IOST Foundation has notified its community of plans to launch an algorithmic stablecoin. The crypto company submits that its stablecoins will effectively expand the real-world use cases of algorithmic stablecoins and further strengthen the IOST ecosystem.

Although details about the stablecoin remain undisclosed, the IOST team has released a blueprint, revealing the three core problems its impending stablecoin is targeted at tackling. 

According to the announcement, the upcoming algorithmic stablecoin will focus on ensuring the authenticity of oracle price feeds, managing scarcity to ensure price stability, and dealing with deflationary costs, as well as designing a short-term price arbitrage model to reduce short-term price volatility.

More so, the IOST Foundation intends to leverage its large community, underlying solid technical support, and its sophisticated multi-chain ecosystem to develop the decentralized algorithmic stablecoin. 

Part of the announcement read thus:

The IOST Foundation will put in more funding and resources focusing on gaining wider attention to IOST’s multi-chain ecosystem and making IOST’s algorithmic stablecoin well-known as a higher annualized interest rate and lower-risk coin against its competitors.

Decentralized Algorithmic Stablecoins continue to Bubble

Decentralized Algorithmic Stablecoins continue to Bubble

Stablecoins bring numerous advantages to the table, with the major benefit being their ability to protect crypto users from market volatility. However, with recent events, algorithmic stablecoins prove to be a better option for many crypto users. 

Consequently, many crypto projects have deemed it necessary to launch their unique crypto-backed stablecoins. In April 2022, the Tron DAO launched its algorithmic stablecoin called USDD (Decentralized USD). 

Similarly, Cardano and IOST are gearing up to join the train. Likewise, major developments have been made around the Hive-Backed Dollars (HBD). Interestingly, Hive users now get a 20% APR for saving (locking) Hive-Backed Dollars in their Hive wallet.

On the whole, algorithmic stablecoins have recorded astronomical growth in recent times,  with Terra’s UST leading the way. Recently, the Luna Foundation Guard (LFG) acquired an additional 37,863 Bitcoin worth $1.5 billion to further back its UST.

At the time of writing, Terra’s UST sits number three on the list of top stablecoins by market capitalization with a value of $18.62 billion. Gradually, decentralized algorithmic stablecoins are becoming the standard for every blockchain.

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