I want to take you on a journey to explore the world of Cardano and more importantly how Djed works. For those of you who are new to the crypto-sphere, you might have heard of Bitcoin, Ethereum, or even Dogecoin, but what about Cardano? Well, let me tell you, Cardano is a blockchain platform that's shaking up the industry with its innovative approach to solving some of the problems faced by other cryptocurrencies. I'm a fan of its founder Charles Hoskinson, and I love what they are doing as a crypto project.
What is Cardano?
In layman's terms, Cardano is a decentralized platform that allows users to transfer funds and execute smart contracts securely. It's similar to Ethereum in that regard, but it's unique in that it was built from the ground up with a scientific philosophy and a commitment to research and development.
Cardano is more than just a cryptocurrency, it's a platform that's designed to support a wide range of use cases and applications. Whether it's decentralized finance, identity management, or supply chain management, Cardano has the potential to revolutionize many industries.
When Cardano Started
Cardano was first conceptualized in 2015 by a group of researchers and engineers, led by Ethereum co-founder Charles Hoskinson. They saw the potential for blockchain technology to change the world, but they also recognized that there were major challenges that needed to be addressed, such as scalability and security.
After years of research and development, Cardano officially launched in 2015 as a proof-of-stake blockchain, meaning it uses a different consensus mechanism than traditional proof-of-work blockchains like Bitcoin.
How Cardano Works
At the heart of Cardano is a scientific approach to blockchain technology that's focused on security, scalability, and sustainability. Cardano uses a unique consensus mechanism called Ouroboros, which is based on a proof-of-stake algorithm that allows for faster, more energy-efficient transactions.
One of the key features of Cardano is its multi-layer architecture, which separates the computation layer from the settlement layer. This allows for greater scalability and security, as well as the ability to add new features and upgrades without disrupting the network.
Another important aspect of Cardano is its commitment to research and development. The Cardano team is constantly working on new innovations and improvements, and they're actively engaged with the broader scientific community to explore new approaches to blockchain technology.
Now, let's dive In, How Djed Works.
After over a year of preparations and development, and following a successful security audit, Djed is finally live on the Cardano mainnet.
This is a big deal for Cardano's ecosystem and for the DeFi world as a whole.
Djed offers users the ability to hold, mint, and burn DJED and SHEN, the two tokens that make up the Djed platform.
Access to Djed is easy, with the platform available at djed.xyz.
Additionally, DJED is already listed on MinSwap, Wingriders, and MuesliSwap, and there are plans to list it on more top platforms in the Cardano ecosystem.
Bitrue will be the first exchange to list DJED and SHEN.
So, how does Djed work?
DJED is pegged to the US dollar and is backed by the base coin, ADA, which operates as an independent asset.
The reserve coin for Djed is SHEN.
The platform uses over-collateralization, meaning that there's always at least 400% - 800% more collateral in the reserve than the value of DJED in circulation.
This mechanism helps protect the value of DJED in different market scenarios.
If the reserve ratio drops below 400%, the platform prevents the burning of SHEN and the minting of new DJED.
Now, why is this important?
Well, as you probably know, stablecoins are popular on and off ramps for cryptocurrencies.
They provide a more stable option for those who are looking to hold a cryptocurrency that won't be as volatile as others, especially when you take profits.
But, let's face it, not all stablecoins are created equal. All you need to do is to take a look at what went down with Terra Luna and its collapse.
That's where DJed comes in, bringing its own special brand of stability to the table.
If the ratio goes over 800%, users can't mint any more SHEN, but they can still mint and burn DJED. In any scenario, DJED is always redeemable.
SHEN holders stand to benefit from providing liquidity to the Djed platform.
In addition to DJED and SHEN mint and burn fees, they'll also receive delegation rewards, LP rewards, and farming rewards from DEXs such as Wingriders, Minswap, and MuesliSwap.
The operating fees for Djed are paid in ADA and are funneled into the COTI Treasury, where they're distributed as rewards to Treasury users.
Over the course of 2023, the Djed team will continue to improve the platform. Version 1.2 will use Vasil features, including a reference script, to increase scalability.