A few days ago, Charles Hoskinson, the CEO of IOG, who created the emerging smart contract platform Cardano (ADA), introduced Djed, a crypto-backed pegged algorithmic stablecoin.
In a tweet on 15th July 2021, Hoskinson shared the screenshots of a paper titled “Djed: A Formally Verified Crypto-Backed Pegged Algorithmic Stablecoin.”
In the paper shared by the mathematician, Djed is described as “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 a sense that the bank keeps a volatile cryptocurrency in its reserve.”
In order to go deeper into the uniqueness of the stablecoin, Hoskinson conducted a live Ask Me Anything (AMA) session on 16th July 2021.
According to Hoskinson during the AMA, despite the fact that the full whitepaper has not been released, researchers have been busy verifying the new stablecoin using Isabelle code, a tool used by computer scientists to prove theorems and make them easily convertible into code.
The creator of Cardano further stated that Djed will eventually be implemented on Cardano’s smart contract platform, as a native application. He also said that the software company, IOG, already has a viable vendor for the new project.
“What makes this paper very unique is the Isabelle code associated with paper. So the Isabelle higher-order logical formalization, there’s actual prose here. You can see all the Isabelle code, pages and pages and pages and pages of it. So a lot verification was done here, and that is just a truly remarkable thing, and it’s very unique for papers of this nature.”
“One of the things we’re doing with this stablecoin paper – after we clean it up a little bit more, because it’s so involved and there are so many moving pieces to it that have to be carefully thought about – is actually implementing it into Plutus as a Plutus native application. So we have a vendor in mind that we think would be perfect for this work, and we’re going to work closely with them.”