Djed’s Biggest Upgrade Since Launch is Now Live!

Published in

COTI

4 min readAug 8, 2024

Djed 1.2 is now live on Mainnet. This is the biggest upgrade to Djed since launch, featuring enhancements to SHEN, new mint and burn minimums, a new percentage-based operator fee, and a shift to more dynamic base fees.

We’re excited to share that Djed 1.2 is now live, featuring major upgrades that COTI, alongside technical collaboration from Input | Output, have been diligently working on over the past few months.

In its first year since launch, Djed, Cardano’s overcollateralized stablecoin, demonstrated remarkable stability, maintaining its peg during market volatility. Now, the release of Djed 1.2 brings some exciting improvements, including several enhancements initially planned for Djed 1.3:

Lowered minimums for all mint & burn actions
Switching from a fixed to percentage-based operator fee
Moving to a more dynamic base fee model based on the protocol ratio
Migration to Plutus V2, which will bring enhanced interoperability, oracle slippage detection and more

All the above will significantly enhance the Djed protocol and benefit its users by increasing accessibility, lowering the barrier to entry, improving cost-efficiency, and providing a more flexible fee structure.

You can experience all the upgrades to Djed here: djed.xyz

Let’s dive in.

Moving to a More Dynamic Base Fee Model

Dynamic fees were originally planned for Djed 1.3, but the team was able to develop this feature ahead of schedule. While the current Djed protocol uses a fixed base fee structure, the upcoming update introduces a more granular and flexible fee system.

This dynamic system allows the protocol to adjust the base fees between 0–5%, according to the ratio, encouraging users to mint or burn DJED/SHEN as needed to maintain optimal protocol health.

Note: These fee ranges are subject to change and can be adjusted according to the ratio.

Minting & Burning Just Got Easier — Introducing Lower Minimums

Djed 1.2 aims to encourage more users to participate in the protocol, which is why we’re happy to share that we’re lowering the required minimums for minting and burning DJED and SHEN from 200 ADA to only 50.

This change increases accessibility by allowing smaller investors to participate in the Djed ecosystem with less capital, significantly lowering the barrier to entry. We anticipate increased liquidity and overall participation in the Djed protocol, contributing to its stability and growth.

More ADA Reserves Allocated for SHEN Stability

An additional upgrade to the protocol allows for a new allocation of ADA within the reserve, which increases the backing of SHEN in the smart contract.

These upgrades help encourage active participation while maintaining the protocol’s stability.

Switching from Fixed to Percentage-Based Operator Fee

Djed 1.1 uses a fixed fee structure. In Djed 1.2 we introduce a more flexible, percentage-based fee system. Users will benefit from this more adaptive fee structure, making transactions more cost-effective across different order sizes and reducing the likelihood of completely failed transactions.

The operator fee will now be charged as a percentage of the transaction value instead of a fixed fee, and includes minimum and maximum limits. As a reminder, the operational fees are streamlined into the COTI Treasury, and distributed as rewards to its users.

With this update, Djed 1.2 also introduces a more user-friendly approach to handling insufficient fees. If a transaction doesn’t have enough fees to cover the entire intended amount, it won’t be canceled outright.

Order status notifications will also be sent to users’ wallets in the event of actual cancellation due to insufficient fees.

This change adds to an already impressive list of incentives for SHEN holders, including protocol mint/burn fees, delegation rewards, and DeFi APRs.

Migrating to Plutus V2

We are also happy to share that in order to increase the latest advancements in Cardano’s smart contract capabilities, Djed is migrating to Plutus V2.

The migration to Plutus V2 brings several important improvements to the protocol, such as reducing transaction size and cost, and streamlining the development process. These enhancements will result in a more cost-efficient, secure, and developer-friendly Djed protocol:

Enhanced interoperability with existing Plutus V1 contracts on the Mainnet
Oracle slippage detection to prevent failed transactions due to rate changes
Stricter order submission validation using reference inputs
Implementation of inline datums, allowing datums to be attached to outputs instead of datum hashes

Upgrades to Djed live now!

These upgrades reflect COTI’s ongoing commitment to improving Djed. The DeFi landscape on Cardano continues to grow, and Djed is well-positioned to play a crucial role in this expansion.

We invite everyone to head over to djed.xyz and experience the upgrades to Djed today!

If you want to try things out first, the Testnet is a great place to experience the new mechanics, and you can access the Testnet here.

Through ongoing development and a focus on security, efficiency, and user experience, Djed aims to remain at the forefront of stablecoin technology in the Cardano ecosystem. Stay tuned for more updates.