The popular Cardano-powered algorithmic stablecoin Djed ($DJED), which is backed by nearly 40 million $ADA tokens, has lost its peg to the value of the U.S. dollar and is now trading at $1.09 across decentralized exchanges on the Cardano ecosystem.
Data shows that the DJED stablecoin has lost its peg after it failed to maintain its reserve ratio between 400% and 800%., as at the time of writing data from the project’s website shows the reserve ratio is at 346%.
DJED’s price chart shows that the cryptocurrency hasn’t been able to remain stable around the $1 mark for some time, fluctuating over the last few weeks.
By buying and selling the project’s $SHEN tokens, users can contribute to the stability of the USD currency peg of Djed, and earn a share of transaction fees in the reserve pool. Holders of SHEN can also potentially profit from its short-mid term price fluctuations.
Djed itself is a formally verified algorithmic stablecoin for Cardano that is backed by cryptocurrency, IOG, the company behind the development of Cardano, designed the stablecoin, while COTI Group is responsible for issuing it. The stablecoin was announced back in September 2021, and launched earlier this year.
According to Djed’s website, $DJED should be backed by “400-800% overcollateralization and is guaranteed by its reserve coin, $SHEN.” Being overcollateralized, the website adds, means the protocol “eliminates the need for trust in a governance token as seen in algorithmic stablecoins.”
At launch, the stablecoin was quickly supported by a number of Cardano-powered decentralized exchanges (DEXes), such as MuesliSwap, Minswap, and WingRiders, as well as several major exchanges including Bitrue.
Notably, Cardano itself has seen numerous exchanges delist its native token $ADA after it was deemed a securities in lawsuits filed by the U.S. Securities and Exchange Commission (SEC) against leading cryptocurrency exchanges Binance and Coinbase.
Recently, the United Kingdom-based financial technology giant, Revolut, has disclosed it’s set to delist three popular cryptocurrencies for its U.S. users, Cardano ($ADA), Polygon ($MATIC), and Solana ($SOL) through an email sent to its users.
Featured Image via Unsplash
