We would like to propose the addition of $DJED and $SHEN as borrowable and collateral assets to Aada Finance.
Stablecoins are an essential part of DeFi, especially in lending and borrowing. That’s why adding $DJED will significantly improve the user experience and loan utilization rate on Aada Finance. Moreover, adding $SHEN will give lenders and borrowers a new method to utilize the reserve token and earn rewards.
$DJED is an overcollateralized algorithmic stablecoin issued by COTI and developed by the IOG team. It’s the first stablecoin backed by $ADA, which means users can mint $DJED by sending $ADA to a smart contract.
While the $ADA required to mint one $DJED is determined by the current value of the former, price fluctuations are offset by the issuance and burn of $SHEN. The latter serves as the reserve token for $DJED, protecting it from de-pegging by overcollateralizing it with a minimum of 400% and a maximum of 800%.
Undoubtedly, the $DJED stablecoin is one of the most highly-anticipated projects on Cardano. It aims to empower the network DeFi ecosystem with a robust algorithmic solution to counter market volatility and give them higher confidence in using lending and borrowing services. On the other hand, $SHEN holders benefit from numerous incentives, which makes holding the token an attractive opportunity. It’s a great way to earn rewards and/or arbitrage on its price fluctuation.
- $DJED delivers a fail-proof stablecoin to Cardano, which lenders and borrowers can use without suffering from market fluctuations
- Users can provide liquidity and earn trading fees on both tokens
- $SHEN holders are rewarded with a share of the fees collected from $DJED and $SHEN transactions
- $SHEN holders earn $ADA PoS rewards
$DJED’s and $SHEN’s circulating supply is determined by the amount minted and burned by users. Every $DJED token is overcollateralized by $ADA with a minimum reserve of 400% and a maximum reserve of 800%. As $DJED’s reserve token, $SHEN covers any price fluctuations in the $ADA price that may pose a regarding covering redemptions. So far, the following exchanges have announced the introduction of liquidity pairs (LPs):
DEX - Minswap, Wingriders, Muesliswap
CEX - Bitrue
Disclaimer: Keep in mind that the initial version of $DJED will be “Minimal Djed”, which may pose certain risks. You can find more information about it here.
In conclusion, $DJED is set to revolutionize the Cardano DeFi by introducing “the first formally verified stablecoin protocol” on the network. Its robust algorithm will provide an unbreakable peg during market volatility, something crucial for a lending and borrowing protocol like Aada Finance. Meanwhile, $SHEN will enable arbitrageurs to take advantage of the price fluctuations and earn rewards.