Reserve percentage of Djed, an algorithmic stablecoin designed for the Cardano ecosystem by Input Output Global (IOG), has fallen by 300%, real-time data June 11 Offers. The decline comes amid dumping of Cardano (ADA) prices.
Very low reserve ratio to 300%
Jed is a stablecoin issued by COTI, and by default, Jed is supposed to be 400% to 800% collateralized, depending on the source.
With the turmoil facing the cryptocurrency market and the drop in ADA prices, the collateral ratio is now 3X; Less than ideal range 4X to 8X.
A recent update from the official JED website showed that the stablecoin is backed by 38108.555.96 ADA constituting the primary reserve. In turn, this could enable minting 10,175,632.28 DJED.
This reserve pool of more than 38 million ADA is from ADA fees sent to the pools of contracts at the minting of Jed or Shin, the reserve currency that ensures the stability of the Jed stablecoin.
However, JED has not disengaged amid this downturn and continues to track the US dollar with ADA providing the necessary support.
according to trackers On June 11, both DJIDs were trading at $1.02 to the US dollar, with a circulating bid of $3,340,007.
Protocol modifications
There are further reports that users have been unable to mint Djed at $1/USD from decentralized exchanges, the stablecoin is sufficiently backed, and users can exchange Djed for other assets.
By default, the lower the reserve percentage less 4X current, the protocol prohibits the new JED mint. At the same time, SHEN holders cannot copy their tokens for ADA but can mint new SHEN to increase the reserve ratio. At the same time, Djed holders can burn their tokens against ADA, which increases the reserve ratio.
Djed launched on the Cardano mainnet in late January 2023. As an ADA-backed, COTI-backed computational stablecoin, the coin is designed to be over-the-top. Besides over warranties from 400% to 800% ADA, GED is also guaranteed by SHEN.
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Approvals by Design were oversubscribed, and the IOG, in their white paper, He said The goal is to eliminate the need to trust governance code as seen in other algorithmic stablecoins such as MakerDAO. MakerDAO issues DAI but has a governance token, MKR, that is a lender of last resort.