The ways to earn on Djed holdings continue to grow.
Cardano’s overcollateralized dollar-pegged stablecoin Djed is now available for lending and borrowing on Liqwid.
COTI, issuers of the algorithmic stablecoin, today shared a Twitter thread from Liqwid Labs disclosing the development. According to Liqwid Labs, users could also use qDjed, a derivative of the stablecoin, as collateral to borrow ADA. The firm asserted that it would monitor the backend of things to ensure the user experience is satisfactory.
— COTI (@COTInetwork) March 3, 2023
In further detail, Liqwid outlined risk parameters for the market. The maximum loan-to-value (LTV) ratio is set at 75%. It indicates how much users can borrow against their collateral. At the same time, the liquidation threshold is set at 80%, so if the loan rises above 80% of the collateral, it could be liquidated. Finally, the liquidation bonus is set at 10%.
Liqwid Labs has urged stake pool operators (SPOs) to upgrade liquidation bots to the latest version to ensure the best possible experience.
For context, Liqwid is a popular platform that offers decentralized lending and borrowing markets with varying interest for the Cardano network. Consequently, lenders would earn interest while borrowers can use the assets to participate in other markets or trades and earn.
The Liqwid Djed market is the latest in a growing list of ways that Djed holders can earn from their stablecoin holdings. Recall that Bitrue, a prominent Singapore-based exchange offers up to 50% annual percentage yield (APY) for staking the stablecoin for 15 days.
The Cardano stablecoin launched at the end of January and, in just over a month, has received support from several platforms in part thanks to the efforts of COTI in establishing partnerships before launch. At press time, the stablecoin boasts a 24-hour volume of over $352k per data from CoinGecko.