Cardano and IOST announce their algorithmic stablecoin plans

The COTI team has announced the introduction of the public Tesnet version of Djed — a decentralized algorithmic stablecoin based on the Cardano network - in conjunction with the Cardano team.

IOST plans to launch a decentralized algorithmic stablecoin
IOST | Image: IOST

The Testnet environment will allow the key functionality to be tested without the risk of using real money.

Shen, a reserve coin specifically created to guarantee the collateralization rate and the peg of the stablecoin, will sustain Djed's stability.

Djed has been under development since September 2021, with the goal of being "the ultimate token with which Cardano's whole network transaction costs will be paid."

IOST Has Announces Plans To Launch an Algorithmic

Second, the IOST team has revealed plans to produce an algorithmic stablecoin that addresses the three issues below. The team says that they will ensure that oracle price feeds are genuine.

Moreover, they said that they will maintain price stability and deal with deflationary costs, manage scarcity. In addition, they will create a short-term price arbitrage model to reduce price volatility in the short run.

The IOST team hopes to 'exploit its robust community of hundreds of thousands of users, underpinning excellent technical support, and the increasingly mature multi-chain ecosystem, which provides a good platform for the next decentralized algorithm stablecoin.'

The IOST Foundation has also increased its financing and resources for the network's multi-chain ecosystem in order to make its algorithmic stablecoin known for its high annualized interest rates and lower risks than its competitors.

The announcements of Cardano and IOST establishing algorithmic stablecoins follow Tron's introduction of USDD and Terra's purchase of $1.5 billion in Bitcoin as reserves for its UST stablecoin.

Furthermore, the two statements are unsurprising, considering Terra's Do Kwon's prediction that decentralized stablecoins would be the way of the future. He stated, "

Stablecoins created by algorithms are quickly becoming the standard, with protocol-issued dollars appearing on every blockchain.

Detractors are blind to the fact that currencies are ultimately backed by the economies that use them, and the future plainly favors a decentralized, self-sovereign stablecoin.

If you envision currency pegs for stablecoins as temporary, this becomes clearer. Consider this.