Amid stablecoin turbulence, Djed to expand to Ethereum, Binance Smart Chain 10 months ago · 2 min read
Djed's stability during recent turbulence prompted DeFi protocols to request the stablecoin go multichain.
2 min read
Updated: March 21, 2023 at 5:06 pm
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The Djed stablecoin would soon be available on Ethereum, Binance Smart Chain (BSC,) and others.
COTI CEO Shahaf Bar Geffen said COTI had always planned for Djed to branch out from Cardano into other blockchains, but recent stablecoin turbulence has accelerated the move.
Recent weeks have seen significant rumblings in the stablecoin sector. The issue began with the disclosure that Circle’s USDC held approximately $3.3 billion with Silicon Valley Bank, which filed for Chapter 11 bankruptcy on March 17.
Fears over being unable to redeem at its $1 face value sparked a de-peg. During peak fear, the stablecoin sank as low as $0.8217 on March 11. The peg price has since been re-established.
The instability spread to other stablecoins and DeFi protocols. For example, DAI, which holds about 34% of its collateral in USDC, also suffered a de-peg that bottomed at $0.8918. It has also since re-established its peg price.
Since March 11, the stablecoin has lost 25% of its market cap, falling to a 17-month low at $35.3 billion.
Bar Geffen said amid the stablecoin turmoil, Djed did not lose its peg. He attributed the token’s stability to being decentralized, over-collateralized, and verifiable – as collateral is viewable on-chain.
“This is why the trust remains, and this is why Djed did not lose its peg even though much bigger stablecoins lost their peg.”
This outcome set off a high demand for Djed, with Bar Geffen reporting record volume on dexes. He also mentioned that non-Cardano protocols had requested that Djed go multichain.
“We’ve also received requests from other DeFi ecosystems, outside of the Cardano ecosystem, to have Djed on Ethereum, to have Djed on Binance Smart Chain, just to name a few.”
The COTI CEO said going multichain was always in the plans. But following the requests, multichain plans will “probably [be] exercise[d] much faster.”
Selling the idea, Bar Geffen said spreading Djed across other, bigger DeFi ecosystems will yield benefits in more fees, the value for Shen holders, and better APY for treasury participants.
Although ADA backs Djed, the Shen token is also used as a “fail safe” in providing liquidity in instances of ADA price fluctuation and the possibility of insufficient ADA in the smart contract to pay Djed sellers.