Cardano blockchain set to feature defi-focused stablecoin

The Cardano Foundation - as well as Input Output Hong Kong (IOHK) - has been working tirelessly to make Cardano a more suitable blockchain for developers.

This week, the company made a huge announcement, confirming the launch of a stablecoin on its blockchain.

Easier, Cheaper Transactions

In a new announcement, IOHK confirmed that it had partnered with Coti - Cardano’s payment gateway provider - to launch a stablecoin on the blockchain. The stablecoin is Djed - an asset focused on the decentralized finance (DeFi) space. The partnership had also been announced at the 2021 Cardano Summit, joining a spate of other developments coming to Cardano.

Djed is a DeFi-focused stablecoin that operates based on an algorithmic design and smart contract functionality. The asset optimizes price stability and reduces transaction fees, offering an interesting method of paying for DeFi transactions. According to its whitepaper, Djed will operate like an “autonomous bank,” buying and selling stablecoins for a specific price range. The stablecoin will also maintain a reserve of base cryptocurrencies while minting and burning several other stable assets and reserves.

Amongst other things, Djed will help to reduce transaction fees on the Cardano blockchain. It is yet another overture from the Cardano Foundation to present Cardano as a viable alternative to Ethereum, which has so far been bogged down by rising gas fees and network congestion.

Going All Out for FeFi

So far, the Cardano Foundation appears to be more focused on the DeFi space. It is understandable, with the sub-industry generating billions for developers and its top protocols. By luring developers away from Ethereum, Cardano is taking a bullish approach towards becoming the largest and most popular blockchain.

Djed isn’t the only strategy for Cardano’s DeFi focus. At the Cardano Summit, the Foundation announced that EMURGO - its commercial arm - will commit $100 million towards funding startups in the DeFi and non-fungible token (NFT) space.

Discussing the plan, Ken Kodama - EMURGO’s chief executive - explained that they will focus on supporting startups and growth-stage companies working on DeFi and NFT projects. These projects will be native to the Cardano blockchain, with EMURGO also focusing on improving education and awareness about the blockchain.

As part of the campaign, EMURGO’s African arm will support about 300 startups on the continent, offering funding and incubation for them. The company will partner with smart technology incubation engine Adanian Labs to expand the Cardano ecosystem’s use and awareness across Africa.

At the same time, MEURGO Ventures will expand functionality for Cardano in the developed markets. It will focus on using Cardano to drive meaningful solutions, although it will maintain its focus on NFTs, DeFi, and developer education.