The CEO of IOG, Charles Hoskinson, who created the emerging smart contract platform, Cardano (ADA), has some hours ago introduced Djed, an algorithmic stablecoin designed for the decentralized finance (DeFi) sector.
In a tweet on 15th July 2021, Hoskinson shared the screenshots of an article titled “Djed: A Formally Verified Crypto-Backed Pegged Algorithmic Stablecoin.”
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Been Busy. pic.twitter.com/mmYGoBAsPO
— Charles Hoskinson (@IOHK_Charles) July 15, 2021
Abstract of the paper says:
“Djed, an algorithmic stablecoin protocol that behaves like an autonomous bank that buys and sells stablecoins for a price in a range that is pegged to a target price. It is crypto-backed in the sense that the bank keeps a volatile cryptocurrency in its reserve. The reserve is used to buy stablecoins from users that want to sell them. And revenue from sales of stablecoins to users are stored in the reserve.”
The paper further stated that aside from the stablecoins, the bank also trades digital currencies with the hope of maintaining a reserve ratio that is notably greater than one.
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The Significance of Djed Protocol
According to the authors of the paper, this is the first stablecoin protocol where stability are precisely and mathematically stated and proven, stating that the claims and proofs are formally verified:
“…the claims and their proofs are formally verified using two different techniques: bounded model checking, to exhaustively search for counter-examples to the claims and interactive theorem proving, to build rigorous formal proofs using a proof assistant with automated theorem proving features.”
Does The Project Have Any Practical Value?
In response to the post that attracted thousands of reactions, a user asked about the practical value of the new Djed, the new stablecoin protocol.
In response, Charles Hoskinson said, “Algo Stablecoin done.”
Algo Stablecoin done
— Charles Hoskinson (@IOHK_Charles) July 15, 2021
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In other news, the development of the Cardano blockchain received an exciting boost today after it was confirmed by IOG that Alonzo Blue has successfully advanced to White, bringing the Cardano network closer to the much-anticipated smart contracts era.
IOG tweeted, “HARD FORK SUCCESSFUL: Delighted to report around 19.44 UTC today we successfully forked the Alonzo testnet to the new Alonzo White node. The new network is happily making blocks already.”
