I don’t see ADA as a bad investment. It is true that year 2022 was volatile and Cardano has seen a decline of over 80% since January 2022, Despite this, this altcoin Cardano have seen significant developer activity and partnerships, which market experts believe will drive the price of the currency.
Cardano is a major competitor to Ethereum due to its proof-of-stake blockchain. Upcoming upgrades like Hydra will boost the price, cardano price prediction for 2023 is to reach as high as $0.71 as per coinpedia. However, the fact that Cardano has passed the $0.25 mark suggests that it may experience a bull run in the near future.
Just thought I’d pop in and share a similar post I came across on reddit.
How exactly is the DJed and ADA relationship different to USD/LUNA? Is there a similar risk?
Many algorithmic stablecoins have collapsed. UST, Basic Cash, Empty Set Dollar crashed.
How is ADA and DJED different to UST/Luna?
The price of Djed will aspire to be $1. The basecoin which is the coin that Djed is backed by, is $ADA. Let’s assume $ADA is worth $2, so in order to mint 1 Djed, the user will need to send 0.5 $ADA to the contract. This process can be repeated, users can send more and more $ADA to the contract and get more $Djed. This is how the contract builds its pool. If the user wants to sell 1 $Djed, he is sending it back to the contract, which then burns this Djed, and sends back the amount of $ADA that is equivalent to $1 to the user.
How exactly is this different to LUNA?
Because 1 UST was defined as being equal to $1 worth of Luna, that meant that while the amount of Luna handed over in a swap for UST would vary, a holder of $1 in UST would always get $1 in value back. That created arbitrage incentives for traders that were designed to keep the value of UST at or close to $1.