Cardano Stablecoin DJED Depegs as its Reserve Ratio Falls, Causing Unminting Issues

The COTI-issued stablecoin Djed has deppeged across all Cardano decentralized exchanges as the token’s reserve ratio recently fell below par.

Launched  on mainnet in January 2023, the Cardano algorithmic stablecoin Djed is already causing  problems related to de-pegging and unminting for its users, The Cardano Times (TCT) revealed.

Djed Depegs as Reserve Ratio Slumps

According to the free media network of Cardano, the reserve ratio of Djed has fallen below the percentage range needed to keep the algorithm-based stablecoin stable.

$DJED $DJED #Cardano $DJED pic.twitter.com/mZLUd0E2bC

July 5, 2023

Notably, Djed’s reserve ratio was designed to stay within the range of 400% to 800% to maintain parity with a dollar constantly.

However, the Cardano stablecoin’s reserve ratio has declined to 346% per a snapshot shared on Wednesday by  TCT.  As of July 4, its base reserve had roughly 39, 343,556 ADA, equivalent to 11,555,202 DJED tokens.

This has resulted in the inability of users to un-mint their tokens through the Djed protocol. The stablecoin, which has the DAG-based Layer-1 protocol COTI as its official issuer, has depegged on all Cardano decentralized exchanges.

The tweet revealed: 

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