Volatility in cryptocurrencies is one of the larger obstacles to its widespread adoption. Blockchain technologies provide benefits such as transparency, data immutability, and proven security of financial operations. However, volatility in relation to fiat currencies hinders using cryptocurrencies as accounting and exchange units in daily operations despite the potential benefits.
A stablecoin is a cryptocurrency pegged to a specific value, such as 1 USD, using intricate mechanisms that maintain a low price deviation from their target price, making them useful to store or exchange value while retaining the inherent benefits of being blockchain based.
Recently, IOG has teamed up with Emurgo, one of the three founding partners of Cardano, and the Ergo blockchain to work on a stablecoin contract called Djed. Djed is based on algorithmic design. This means it uses smart contracts to ensure price stabilization, and that the coin will be useful for decentralized finance (DeFi) operations.
Read more in the full article from IOHK
