Monat: November 2022

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Cardano’s algorithmic stablecoin to go live on mainnet in January 2023

Djed, Cardano’s over-collateralized algorithmic stablecoin, will be live on mainnet in January 2023 following a successful full audit. The scheduled launch is a great milestone coming days after Shahaf Bar-Geffen’s announcement about the stablecoin on the main stage at the Cardano Summit.

Making the announcement, COTI’s CEO Shahaf Bar-Geffen said:

“Djed going to public mainnet is a great achievement, following a lot of hard work from IOG and COTI. Recent market events have proven again that we need a safe haven from volatility, and Djed will serve as this safe haven in the Cardano network. Not only do we need a stablecoin, but we need one that is decentralized, and has on-chain proof of reserves. Djed is just that and I see it becoming the top stablecoin on the Cardano network, considering all of the integration partnerships already signed for it.”

Cardano remains prudent as the launch approaches

Following the Terra LUNA crash that resulted from the de-pegging of their native algorithmic stablecoin Terra USD (UST), Cardano has assured investors that they have been very prudent in the way they approach the release of their stablecoin. One of the things that they have had to do is ensure that a thorough audit took place besides other rigorous stress tests before the stablecoin is launched on the mainnet.

Cardano has also said that it will adopt a gradual and slow approach to providing ADA liquidity to the Djed smart contract. This will allow Cardano to pace themselves and carefully grow the stablecoin.

Once the Djed is launched, it will be integrated with select top Cardano partners to allow for more use cases.

Djed stablecoin features

Djed ($DJED) is an over-collateralized algorithmic stablecoin, built on Cardano and powered by COTI. It will be pegged to USD and backed by ADA.

It will use SHEN as its reserve coin.

$DJED’s algorithm is based on a collateral ratio within the range of 400%-800% for $DJED and $SHEN in order to ensure there’s enough $ADA in the pool.

The post Cardano’s algorithmic stablecoin to go live on mainnet in January 2023 appeared first on CoinJournal.

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Tether’s USDT issuance protect’s the stablecoin from FTX-Alameda’s crisis

The collapse of FTX and Alameda Research hasn’t affected the USDT stablecoin, thanks to Tether’s issuance policy.

Tether, the company issuing the USDT stablecoin, has revealed that the recent collapse of the FTX exchange and its Alameda Research hedge fund, doesn’t have a negative impact on its ecosystem.

According to Tether’s latest blog post, the company’s issuance policy protects it from Alameda’s failure. Alameda Research is one of the leading issuers of the USDT stablecoin.

Tether explained that its USDT stablecoins are issued when institutional parties send USD to Tether. The company issues the USDT on a 1:1 basis corresponding to the amount of USD sent to Tether. 

Tether added that it converts the USD into reliable, liquidity and conservative collateral ( US Treasuries, etc.). This implies that all USDT stablecoins are fully collaterised by Tether’s reserves, and every USDT can be redeemed 1:1 with USD.

As a large issuer of USDT, Alameda Research sent Tether USD, and Tether issues USDT. The USD from Alameda Research remains in Tether’s custody, but they are not on Alameda’s balance sheet. The collateral backing Alameda’s USDT is not on Alameda’s balance sheet, Tether added. 

Tether revealed that Alameda can still redeem any USDT they have  USD via Tether’s redemption facility. The company further added that it doesn’t have any outstanding loans of USDT, of Tether’s reserves, or of any other funds whatsoever. Tether wrote that;

“The main problem countless other companies are facing is that they recklessly lent Alameda various assets relying on extremely illiquid collateral. Since Alameda cannot repay those loans at this time, those companies have a hole in their balance sheet. This is not how USD₮ issuance works and is not behavior Tether engaged in with Alameda in any way.”

Tether also clarified its lending process. The stablecoin issuer said the only time it engages in lending is when it is based on over-collaterisation with extremely liquid assets. 

Some cryptocurrency lenders, including Voyager Digital and Celsius, have been struggling in recent months. Binance US is preparing another bid to acquire Voyager Digital following FTX’s bankruptcy proceeding. 

Tether pointed out that it believes the approach of many lenders in this industry has been reckless, lending huge quantities of money, and accepting FTT (and other illiquid assets) and pinky swears as collateral. 

Despite the struggles of some companies like Alameda Research and Celsius, Tether said its operations were not disrupted. 

The post Tether’s USDT issuance protect’s the stablecoin from FTX-Alameda’s crisis appeared first on CoinJournal.