# Djed (DJED)

**Type:** Token
**Source:** [View on Coinpaprika](https://coinpaprika.com/coin/djed-djed/)

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## About

Djed (DJED) is an algorithmic stablecoin designed to maintain a stable value relative to the US dollar. It operates on the Cardano blockchain and aims to provide a reliable and decentralized means of exchange within the Cardano ecosystem and potentially beyond. Djed achieves its stability through an algorithmic mechanism involving a reserve currency called Shen. The core concept involves using Shen to maintain an overcollateralized reserve of Cardano's native cryptocurrency, ADA. This overcollateralization ensures that each Djed token is backed by more than its equivalent value in ADA, providing a buffer against market volatility. The algorithm dynamically adjusts the supply of Djed and Shen to maintain the peg to the US dollar. When demand for Djed increases, new tokens are minted, and when demand decreases, tokens are burned, all while maintaining the collateralization ratio. The Shen token plays a crucial role in absorbing the price fluctuations of ADA. It acts as a reserve asset that can be used to buy back Djed tokens when necessary, ensuring that the price of Djed remains stable. The algorithmic mechanism is designed to be autonomous and transparent, reducing the need for centralized control and increasing trust in the stability of the stablecoin. The stability of Djed relies on the interplay between the ADA reserve, the Shen token, and the algorithmic mechanism. The project emphasizes the importance of rigorous mathematical modeling and testing to ensure the robustness and reliability of the stabilization mechanism. Djed aims to facilitate a wide range of use cases within the Cardano ecosystem, including decentralized finance (DeFi) applications, payments, and remittances. Its stability makes it a suitable asset for hedging against market volatility and for facilitating transactions that require a stable store of value. As the Cardano ecosystem continues to grow, Djed is expected to play an increasingly important role in facilitating adoption and providing a stable foundation for decentralized applications. The long-term success of Djed will depend on its ability to maintain its peg to the US dollar, its adoption by users and developers, and the continued growth of the Cardano ecosystem.

