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With the Cardano project gaining traction, team leader Charles Hoskinson has announced the creation of a new stablecoin for the whole Decentralized Finance [DeFi] ecosystem. According to Hoskinson, the new protocol, named Djed, will function as a “autonomous bank.”
Hoskinson disseminated the material to the community via Twitter and his most recent vlog. According to Hoskinson, the article titled “Djed: A Formally Verified Crypto-Backed Pegged Algorithmic Stablecoin” is “very unique” because the Isabelle code is connected with it. It is worth mentioning, however, that the aforementioned study did not impress many in the community.
Prominent chartist and Bitcoin enthusiast Willy Woo, for instance, replied to Hoskinson by stating,
What were you busy with? Paper is not yours. Did you port the existing Ergo implementation the paper cites?
— Willy Woo (@woonomic) July 15, 2021
On the other hand, Bitcoin enthusiast Preston Pysh called Hoskinson’s “ability to filter and screen capture the pages with the most esoteric math formulas” as impressive.
Others, however, asked to know the practical utility of the Djed stablecoin, to which Hoskinson said that the creation of a “Algo Stablecoin done” was on the agenda. By purchasing and selling underlying assets [stablecoins], the new protocol will assure peg to basic fiat money.
In the past, Tether [USDT] consumers have been confused about what their stablecoin was backed by, and there have been actual inefficiencies identified in the stablecoin ecosystem. With this initiative, it appears that Hoskinson is now heading towards the stablecoin world in order to facilitate the usage of stablecoins inside the larger DeFi business.
The paper also stressed the aforementioned stability claims and identified that this was indeed mathematically proven to be achievable. However, Hoskinson noted in the vlog,
“One of the things we’re doing with the stabelcoin paper is, after we clean it up a little bit more because we’re so involved- there’s too many moving pieces to it that have to be carefully thought about, is actually implementing it in Plutus as a Plutus native application.”
Following the criticism from certain community members, Hoskinson was eager to emphasise the significance of having a reliable stablecoin, one that might make the space more efficient.
While the team continues to work on this new project, Cardano’s Alonzo testnet entered the Alonzo White phase yesterday.
Regardless of what detractors say, the Cardano ecosystem is being maintained by the community. However, Bitcoin’s negative volatility caught up with ADA, and it was trading at $1.18 after a 5% drop in six hours.