Djed Stablecoin Live on Milkomeda C1 Testnet
We are excited to announce a new implementation of the Djed stablecoin protocol in the Cardano ecosystem is now live on the Milkomeda C1 Testnet. Milkomeda C1 is a sidechain that brings Ethereum Virtual Machine (EVM) capabilities to Cardano, which enables rapid development of new dApps for the Cardano ecosystem while using familiar tooling.
Milkomeda C1 was released just two months ago and was well-received, with $97m in TVL in the first week. Already you’ll find many DeFi projects using battle-tested contracts from Ethereum on Milkomeda, where users benefit from fast transaction speeds and low gas fees. In addition, by leaning into a multi-chain vision focused on interoperability, Milkomeda provides the ideal environment for creating innovative solutions and protocols.
Milkomeda–a Kusama for Cardano
Cardano, as a time-tested layer-1 Proof of Stake blockchain with a wide array of stake pools that maintain its solid decentralization, acts as a solid foundation to build off of. Milkomeda capitalizes on this and provides developers a rapid development environment which they are familiar with. The underlying EVM enables the use of solidity smart contracts from Ethereum, significantly increasing the number of skilled developers available to the Cardano ecosystem as a whole.
Developers can use Milkomeda C1 as a sandbox, blending innovations from both Ethereum and Cardano. Projects can deploy their contracts from other EVM chains on Milkomeda easily with the exact same tooling they are used to. In doing so, these projects enter a rich new market and gain access to new users who prefer Cardano. With Milkomeda, developers can choose which protocol they’d prefer for each component of their dApps, leveraging their respective strengths as needed.
Today, this sandbox environment that Milkomeda provides is enabling us to iterate quickly and as such launch (on testnet) a publicly available implementation of Djed in the Cardano ecosystem.
What is DJED?
Djed is a collateral-backed stablecoin that has novel and unique peg-maintaining mechanisms. In short, Djed takes inspiration from reserve banking with an added conservative bent. Instead of using collateralized debt positions or fiat collateral as most stablecoin protocols do, Djed uses a modified reserve banking method to over-collateralize the stablecoin.
These reserves are kept in the chain’s native currency, which in our case will be testnet milkADA. This represents a deliberate shift from constant growth-based economics to conservative, over-collateralized reserve banking with guard rails. This release implements Minimal Djed from the original paper with a minimum reserve ratio of 400% and a maximum of 600%. This means that under normal market conditions, each dollar in StableDjed is backed with 4 to 6 dollars in ReserveDjed. In the event of a crash in the price of ADA, each StableDjed will continue to be fully backed until the reserve ratio underlying the protocol dips below 100%.
The launch of the Djed protocol on Milkomeda C1 Testnet is an example of the rapid innovation cycles that we are excited to see the developer community continue on with moving forward.
What does all this mean for Users?
The addition of Djed to the Milkomeda C1 Testnet represents a step in our mission to empower each crypto ecosystem we deploy on with more and more innovation. On one side developers can learn from the deployment and get inspired by just how quick their development cycles can be. Milkomeda acts as both a sandbox for their latest ideas, as well as a solid production-ready deployment platform for when they want to go live on mainnet.
On the other side, end users in the Cardano ecosystem get to test out Djed for themselves with a clean and straightforward web dApp UI! As this is all taking place on Milkomeda C1 Testnet no real money is on the line, making this the ideal opportunity for the community to begin experimenting with Djed to learn and understand the underlying mechanics.
When Djed goes live on Cardano mainnet, users will already feel comfortable in their understanding of the risks and potential upside involved, thus providing them with the ability to make educated decisions when utilizing their funds in this novel DeFi protocol.
Conclusion
As Milkomeda C1 and Cardano evolve together, the prospect for entirely new and innovative dApps expands. Djed on Milkomeda C1 Testnet is just one example of innovation powered by our interoperability-first mindset.
We invite developers from other networks to start building on Milkomeda C1 today, leveraging it as an environment akin to Kusama, but for the Cardano ecosystem. For the Cardano Community, we look forward to seeing how everyone enjoys their first taste of Djed and what new insights you manage to uncover.
You can start using Milkomeda Djed on the C1 testnet right now by following our latest guide.
Website: www.milkomeda.com
Twitter: @milkomeda_com
