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Djed emerges as the top Cardano stablecoin following public testnet launch

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Djed emerges as the top Cardano stablecoin following public testnet launch

Cardano › Stablecoins

Djed, an algorithmic stablecoin pegged to the Shen token, has launched its public testnet in preparation for mainnet launch in June this year.

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2 min read

Updated: May 6, 2022 at 3:05 am

Cover art/illustration via CryptoSlate

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Payment solutions firm COTI has launched its Djed stablecoin public testnet for the Cardano chain.

“We are excited to announce that after months of intense work along with the Cardano team, the public Testnet version of Djed is now released!”

Stablecoins are a vital aspect of the cryptocurrency ecosystem. By moving into a stablecoin, users can reduce their volatility risk exposure. Similarly, holding stablecoins allows users to jump back in quickly.

In short, by bridging cryptocurrencies with other assets, such as the dollar, gold, or even other cryptocurrencies, stablecoins offer more seamless transacting.

Stablecoins vying for the top spot

As the Cardano ecosystem develops, so does the need for Cardano-based stablecoins. The key contenders in this space are LiqwidX, ADADAO, and Djed.

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The latest technical update from LiqwidX shows a string of technical implementations, such as DemandBatch scripts and MarketMain scripts completed.

But no firm dates on testnet or mainnet are known at this time. The LiqwidX roadmap gives a Q2 2022 testnet date, with the mainnet launch expected sometime in Q3 2022.

ADADAO pitches itself as the world’s first interest-free stablecoin protocol, meaning it facilitates interest-free borrowing. The ADADAO website states the AUSD stablecoin is “coming soon.”

The latest technical update shows the completion of numerous programming tasks, including “endpoint testing.” However, progress also includes the finalization of the front page design.

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A tweet from ADADAO confirms the commencement of protocol testing “on simulation mode” soon. It’s unclear whether simulation mode refers to a private testnet.

The Djed testnet is a big step forward for the Cardano ecosystem

Beating LiquidX and AUSD to the (testnet) punch is Djed, which describes itself as a “decentralized, algorithmic stablecoin that is built on Cardano.”

Algorithmic stablecoins achieve price stability and circulating supply balance through pegging to a reserve asset. In Djed’s case, the reserve asset is the Shen token. Through the Shen token, fluctuations in the price of ADA are offset by Shen covering shortfalls and guaranteeing the collateralization rate.

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Testers have reported several types of error messages when using the public testnet. This includes “invalid collateral type” and “unavailable request” errors.

COTI said it fully expects the discovery of technical faults at this stage. But assured users that all faults will be rectified for June’s mainnet launch.

The testnet environment will only use test ADA and run via the Nami wallet. You can take part by following the instructions in this link.

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44 nations converged to discuss bitcoin in El Salvador: The Davos of crypto?

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44 nations converged to discuss bitcoin in El Salvador: The Davos of crypto?

Guest Post › El Salvador› Bitcoin › Adoption

The current traditional financial system has failed many countries leaving them subservient to the US Dollar, the meeting from 44 countries in El Salvador shows nations want change and see Bitcoin as a opportunity to do so.

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3 min read

Updated: May 24, 2022 at 9:25 am

Cover art/illustration via CryptoSlate

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What happens when a government defaults on its ability to pay debt? On April 18th, Sri Lanka missed its deadline to pay $78 million in global bond payments.

Now, the country is on a trajectory of the biggest default in its history, worth $12.6 billion in overseas bonds.

The default trajectory is followed by mass riots amid food, power, and petroleum shortages. In such a scenario, a nation without much in the way of natural resources and monetary power is left with little recourse except to engage in money “printing” to pay for wages temporarily. 

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As the Federal Reserve increased its balance sheet by $4.5 trillion over the last two years, the central bank triggered an inflation rate above 8%, 4x higher than its 2% target. Yet, this is small compared to Sri Lanka’s nearly 30% inflation, going to 40%.

Such volatility is traditionally found in small-cap penny stock trading—not national currencies. Yet, this is the difference between having a global reserve currency as a cushion and depending on that currency.

From this subservient fiat currency position, Sri Lanka’s energy minister summed up the dire situation as “There aren’t enough dollars available to open letters of credit.”

In other words, despite the Fed’s unprecedented money supply increase that caused its inflationary devaluation, the dollar is comparatively superior to any other currency. This is its Bretton Woods legacy. As such, it is so high in demand that indebted nations can’t even use it for more debts—or is it?

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El Salvador: The Beginning of a New Bretton Woods?

On Monday, May 16th, El Salvador’s president Nayib Bukele said he hosted a major central banking event. Already dubbed the Davos for Bitcoin, it gathered 32 central banks and 12 financial institutions from 44 countries. Without being the first nation to make Bitcoin legal tender, it is highly unlikely that this small country would become a host for such a gathering.

Many of the attendees represent developing nations on the Sri Lankan road to economic turmoil.

Banco Central de São Tomé e Príncipe

Banco Central del Paraguay

Banco Nacional de Angola

Bank of Ghana

Bank of Namibia

Bank of Uganda

Banque Centrale de la République de Guinée

Banque Centrale de Madagascar

Banque de la République d’Haiti

Banque de la République du Burundi

— Nayib Bukele (@nayibbukele) May 16, 2022

The topic of the conference is financial inclusion. This term has been abraded from use. As the Bretton Woods byproduct, the not-invited International Monetary Fund (IMF) has been using it to onboard nations into its debt system. While the organization was tasked to help developed countries and manage financial crises, there is little evidence for this.

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Nathan Jensen, professor of political science in Arts & Sciences at Washington University in St. Louis, author of an IMF study published in the Journal of Conflict Resolution, says,

“My analysis of economic trends in 68 countries over nearly three decades shows that countries signing IMF agreements attract about 25 percent less foreign direct investment than countries not under IMF agreements,” 

To check the IMF’s performance level today, one only has to see the Bank of England’s recent statement warning of “apocalyptic” famine. The governor said that:

“There’s a major worry for the developing world as well. And so if I had to sort of, sorry for being apocalyptic for a moment, but that is a major concern.”

When extra fat is stripped away, the world’s core issue is scrambled money allocation signaling. Central banks use their monetary tools to deal with temporary issues, often under political pressure. In turn, they create a domino of unintended consequences that keep piling up. 

As a decentralized money network outside of central banking, Bitcoin was designed to solve this money allocation problem, as noted by its embedded Genesis block message. El Salvador’s conference is the first step in educating central bankers on how this could happen. In charge of this education is the team with practical know-how, having developed their very own Bitcoin wallet.

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Nicolas Burtey, the founder of Galoy Money behind the Bitcoin Beach wallet, noted that central bankers from developing countries have much to learn, but he was pleased to answer the most common questions.

Some of the questions asked:

– how do we ensure consumer protection with bitcoin?

– if the price go down, how can we refund the user for what they lost?

– why are the benefits of bitcoin versus CBDC?

– how to prevent money laundering?

— Nicolas Burtey ⚡️🇸🇻🇨🇫⚡️ (@nicolasburtey) May 16, 2022

While only 20% of El Salvador’s adults are using the state-sponsored Chivo wallet, the country has seen a 30% tourism spike just on the back of passing the Bitcoin tender law. Yet, it is safe to say this is just the beginning of a trend. 

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Central bankers lining up to get help downloading and using Bitcoin Beach Lightning wallet pic.twitter.com/CWupR1Td4K

— Bitcoin Beach (@Bitcoinbeach) May 16, 2022

After all, it took ten years of Bitcoin development, including a variety of different Bitcoin wallets that progressively improved user experience and lowered entry barriers, to achieve the nationwide adoption milestone. A year from that, there was already a central banking conference in the same country to spur acceleration.

Whether El Salvador’s conference marks the beginning of a new Bretton Woods or not, it is clear that the Davos Agenda is pushing for digital financial inclusion. However, the WEF’s vision of this inclusion is through CBDCs. While central bank digital currency may be digital money, it doesn’t represent a monetary system reset. 

On the contrary, central banks would have more leeway with programmable CBDCs than ever before, once again led by the Federal Reserve and the European Central Bank. Developing countries now have the option to pick an alternative path that would not lead to the same repeat of failed central banking policies.

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Guest post by Shane Neagle from The Tokenist

Shane has been an active supporter of the movement towards decentralized finance since 2015. He has written hundreds of articles related to developments surrounding digital securities – the integration of traditional financial securities and distributed ledger technology (DLT). He remains fascinated by the growing impact technology has on economics – and everyday life.

Learn more →

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PayPal to continue enhancing support for crypto – VP says

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PayPal to continue enhancing support for crypto – VP says

Adoption

PayPal is pro-crypto and intends to add support for as many digital services as possible, including CDBCs, the company’s vice president Richard Nash said in Davos..

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1 min read

Updated: May 23, 2022 at 8:24 pm

Cover art/illustration via CryptoSlate

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Payments giant PayPal intends to integrate all cryptocurrencies, blockchain services and CDBCs within its ecosystem, the company’s vice president Richard Nash told CoinTelegraph in an interview at the World Economic Forum 2022 in Davos, Switzerland.

The company has steadily increased its support for various crypto payment options in recent months. In March, PayPal announced a crypto check-out service for 29 million merchants that allows all merchants to accept crypto payments in Bitcoin, Ether, Bitcoin Cash, and Litecoin from US customers.

Although PayPal has been one of the largest online payment service providers to roll out crypto integrations, Stripe has only this year announced a new comprehensive solution to help crypto businesses with their payment processes.

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Since last year, PayPal has been making significant moves into crypto with a new crypto unit and allowing Americans to pay with Bitcoin and Ethereum at over 29 million vendors.

In April 2021, PayPal CEO Dan Schulman also revealed the growth of the crypto segment of their business after integrating cryptocurrency payments in Q4 or 2020.

Crypto focus of PayPal’s mobile application Venmo

Although PayPal remains quiet about cryptocurrency services on their social channels and across the major marketing forums, they have tapped into the crypto world through their mobile payments application, Venmo.

With the Venmo app, they are proactive in promoting the crypto payment services available for all Venmo clients. In 2015, Schulman said he believed Venmo’s social feed of transactions to be a ‘secret sauce’ of the application.

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PayPal continues to actively explore the potential of crypto on Venmo, where it helps to onboard new users of cryptocurrencies with educational content and step-by-step instructions. According to EarthWeb, Venmo had over 83 million users at the end of 2021.

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SWIFT Is Experimenting With Decentralized Technologies To Allow CBDC Interconnection

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SWIFT Is Experimenting With Decentralized Technologies To Allow CBDC Interconnection

SWIFT, the interbank payments protocol and messaging system, has announced it is working to connect the different central bank digital currency (CBDC) protocols in development today. The company has partnered with Capgemini, a digital services provider, making a series of experiments to ensure that the new set of CBDCs have cross-border payments and remittance capabilities.

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SWIFT Set to Modernize Connection Systems

SWIFT, the bank and payments interconnection protocol, is working to bring its services to the upcoming group of central bank digital currencies. The member-owned cooperative has announced it is already running experiments with decentralized platforms to ensure that remittances and cross-border payments will be available for users of these currencies in the future.

To SWIFT, the interconnection of this new kind of currency will be pivotal for its success. While there are not many CBDCs operating currently, according to reports from the Bank of International Settlements, nine out of ten central banks are now exploring the possibilities of CBDCs, meaning that there is interest in the subject.

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Nick Kerigan, Head of Innovation at SWIFT, remarked on the importance of this interconnection, stating:

Different systems and different CBDCs will need to be able to efficiently work together, or it will hamper the ability of businesses and consumers to make frictionless cross-border payments using CBDCs.

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CBDC Experiments

The experiments that SWIFT is performing, in partnership with Capgemini, a digital services company, are testing the ability of these new currencies to be exchanged among different systems not designed to perform such functions.

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While the inner workings of the system in place have not been explained to the public, SWIFT clarifies that part of the already existent payments infrastructure is being reused, including existing bank messaging standards and authentication models, ISO 20022, and SWIFT’s private key infrastructure.

So far, the experiments, which use several decentralized ledger platforms, such as Corda and Quorum, show it could be possible to achieve the goals proposed. This would mean that CBDCs could coexist with traditional fiat currencies using SWIFT systems, in a transitional phase to total digitization.

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SWIFT also hinted at the possibility of including other kinds of crypto assets in its network, as they become regulated at a global level.

What do you think about the CBDC experiments being performed by SWIFT? Tell us in the comments section below.

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Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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