Since the crash of the algorithmic stablecoin TerraUSD (UST) in May 2022, many users in the crypto ecosystem have grown tired of that specific asset class. The algorithmic stablecoin market has crashed 10 times from its all-time high before the Terra crash.

However, this has not stopped Cardano network engineers from carrying out the introduction of the overcollateralized stablecoin to the ecosystem on January 31st. New algorithmic stablecoin, Djed (DJED), launched on the Cardano mainnet and is pegged to the US dollar and backed by Cardano’s native cryptocurrency ADA. It uses the Shen token (SHEN) as its reserve currency.

The statement indicates that the new token has just passed a security assessment and has been in development for over a year. As a method for creating new decentralized finance and payment possibilities (DeFi), DJED is a product developed by Coti, a developer of DeFi solutions running on the Cardano blockchain.

The concept of bringing another algorithmic stablecoin into existence caused tremors among members of the online cryptocurrency community ahead of the debut of the new Cardano stablecoin.

This is one of the most recent updates in a series of recent updates that have come out of the Cardano network. These updates include an announcement made on January 12 by co-founder Charles Hoskinson that the ecosystem will be expanding through custom sidechains. This is one of the most recent updates in this series.

On January 23, an anomaly caused fifty percent of Cardano nodes to go offline and require a reboot; this resulted in a network service interruption. This was just a week before the introduction of the new algorithmic stablecoin.

According to a Bloomberg report from early 2023, risk assessment firm Moody’s Corporation is in the process of building a scoring system for stablecoins. This system will include an initial examination of up to 20 digital assets.