Cardano DEXs will support Djed stablecoin liquidity pools starting next week
The upcoming protocol’s stablecoin, djed, and its Shen governance token will list on Cardano-based decentralized exchanges (DEXs) MuesliSwap and MinSwap after their issuance next week, as per tweets from the two DEXs.
As per DeFiLlama, MinSwap is currently the largest Cardano DEX, locking $30 million in tokens while MuesliSwap locks up a relatively smaller $6.5 million worth of liquidity.
The highly anticipated djed stablecoin has been jointly developed by Cardano code maintainer IOG and Coti, a layer 1 blockchain. Djed will be backed by other tokens and requires more than 400% in collateral value to be posted before it is issued to a user.
DEXs rely on smart contracts to match trades between users anonymously and without third parties. These users supply liquidity to trading pools, earning rewards in the form of tokens.
The exact annualized yield offered to liquidity providers of the upcoming Djed tokens was unknown at writing time Friday. However, the tokens are expected to attract liquidity and interest from investors owing to their overcollaterized mechanism.
Shen, the reserve token meant to support djed’s stability, would receive extra rewards when holders of Cardano’s ADA cryptocurrency stake their coins to mint djed stablecoins, which may fuel liquidity for the upstart ecosystem.
This mechanism would allow djed’s value to hold stably during market stress and prevent a repeat of terraUSD, the infamous stablecoin linked to luna, which fell over 99% in May.
Djed is expected to go live on over 40 Cardano-based decentralized finance applications (dapps) on launch. Developers have simultaneously developed DjedPay, a payments application that uses djed, that would allow users to transfer the tokens to merchants and businesses.
Coti and MuesliSwap did not immediately respond to requests for comment at writing time.