In a blog post published yesterday, COTI, the company behind the Cardano stablecoin Djed, announced that holders of SHEN, the coin’s reserve currency, will, at launch, earn rewards for holding ADA in Djed’s smart contract.
In a tweet, COTI expressed their excitement about the news and stated that the new Djed 1.1.1 version would include delegation awards for “$SHEN” holders.
We are happy to share that Djed 1.1.1 will include delegation rewards for $SHEN holders starting from day one! In this update we explained Djed’s economics and delegation process.
Read all about it: https://t.co/Q9rNRCrxL4$DJED $COTI @Cardano pic.twitter.com/11LRFldr11
— COTI (@COTInetwork) January 29, 2023
According to the report by COTI, this is a temporary solution that will be replaced by a multiple-pool staking mechanism in Djed v1.3. Wave Financial will be authorized to mint SHEN using a specific public staking pool backed by ADA deposited in the Djed smart contract.
The pool will charge an 8% operation fee on top of the standard 340 ADA one-time fee for all public pools. This additional fee is meant to discourage non-related participants from joining and to provide $SHEN holders with access to the pool.
The pool will determine rewards based on snapshots taken throughout each epoch, and the rewards will be automatically transferred to qualifying $SHEN holders every four epochs (roughly every 20 days).
Holders of SHEN can monitor these rewards through an interface developed on djed.xyz. Additionally, COTI originally suggested on January 13 that SHEN holders might receive staking rewards with the current Djed version.
$SHEN holders can monitor their rewards through an interface on djed.xyz.
COTI stated:
“The rewards from the pool will be distributed every 4th consecutive epoch (roughly every 20 days) and transferred to eligible $SHEN holders directly to their wallets without any additional action on their part.”
As for the most recent COTI update, some users have expressed concerns about the selection of the stake pool, pointing out that Wave already has 3% of all ADA staked.
According to COTI, users will be able to mint a minimum of $5,000 worth of Djed and burn a minimum of $1,000 worth of the stablecoin. However, large mint and burn operations will be restricted, with only small transactions allowed through exchanges.
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