COTI activates Djed on the testnet with Vasil compatibility and new user capabilities.
In a tweet yesterday, Cardano’s Djed stablecoin issuer COTI disclosed that it had reactivated the stablecoin on the testnet with Vasil compatibility and new user capabilities.
We are happy to share that the public Testnet version 1.1.1 of Djed has been reactivated with new capabilities such as Vasil hard fork compatibility, activity history and more.
— COTI (@COTInetwork) December 5, 2022
Per the accompanying Medium blog post, testnet version 1.1.1, besides being Vasil compatible, has added new features as part of its Nami wallet integration. For example, users can now view the display logos of Shen and Djed and the name of both tokens, COTI revealed. In addition, the wallet now supports divisible units for Shen and Djed.
Furthermore, the testnet will allow users to view their previous transactions. Notably, COTI also disclosed that there would be regular maintenance activities on the testnet, with the first one set for tomorrow.
For context, Djed is an over-collateralized algorithmic stablecoin issued by COTI, a fintech payments company to run on the Cardano chain. The Cardano network, amongst other things, proposes to denominate fees on the network in Djed.
Djed will maintain its peg to the US dollar by maintaining a reserve ratio of 400% to 800%, with Shen, as recently reported. However, to mint Djed, users will have to provide ADA in exchange. Consequently, users burn Djed by swapping it for ADA.
Crypto Community Response
Unsurprisingly, Cardano supporters anticipating the launch of the stablecoin, which would fuel decentralized finance (DeFi) operations on the network, received the news of the new testnet features with excitement. However, a few expressed skepticism.
Cryptonator 1337, who describes himself as a crypto-anarchist, urged his followers to steer clear of the stablecoin. The Navcoin team member alleged that Djed would run on COTI’s Trustchain, which uses Direct Acyclic Graph technology instead of the blockchain for increased scalability to meet the demand of global payments. In addition, he poked holes at the fact that COTI had advisors from Goldman Sachs and HSBC.
Would you put trust into a stablecoin issued by a 'global payment network', that doesn't run on blockchain but is based on DAG (& not too many full nodes), had a partnership with Celsius and got advisors from Goldman Sachs and HSBC?
If yes, please unfollow me and click here 👇 https://t.co/ZYgT2JwXjs
— CR1337 (@cryptonator1337) December 5, 2022
It bears mentioning that these claims are not consistent with the information shared by Cardano and COTI. For example, per a Medium blog post from COTI in September last year, Djed will run on Cardano, not Trustchain. In addition, COTI’s role is limited to developing the user interface, user integration with smart contracts, and enterprise partnerships.
Hoskinson Believes In The Potential Of Algorithmic Stablecoins
While some in the crypto space have given up on algorithmic stablecoins delivering at scale following the TerraUSD de-pegging event, Charles Hoskinson remains optimistic.
In a tweet last Friday, the Cardano founder described algorithmic stablecoins as “the gold standard of the digital age.” By backing these stablecoins with deflationary digital assets, Hoskinson believes they have the potential to replace national currencies.
The concept of algorithmic stablecoins is how we get nation states off of fiat currencies. It's the gold standard of the digital age. Use a deflationary cryptocurrency like bitcoin or ada to collateralize a stable coin that's use as a national currency.
— Charles Hoskinson (@IOHK_Charles) December 2, 2022
How Djed will perform is yet to be seen. However, developers hope to calm fears of another Terra-like collapse by performing stress tests and releasing audits.
Djed Mainnet Launch Date
As previously reported, Djed will launch on the Cardano mainnet in January 2023 after a full audit.
While it is yet to launch, COTI has already entered partnerships with several platforms and decentralized exchanges to integrate the stablecoin.