Another innovation we have to look forward to with Cardano is the Djed algorithmic stablecoin protocol. The white paper on this has been recently published by IOHK and there have been a number of tests already implemented on other networks to refine the design.
In a recent IOHK blog post Olga Hryniuk explores how Djed is the first coin to use formal verification to eliminate price volatility. She writes:
Cryptocurrency volatility is one of the obstacles to its wider adoption. Blockchain technologies provide benefits such as transparency, data immutability, and proven security of financial operations. Yet, it is harder than fiat currencies to predict how the market will behave, or forecast the value of a digital currency. This hinders using cryptocurrencies as accounting and exchange units in daily operations.
A stablecoin is a cryptocurrency pegged to a basket of fiat currencies or a single currency (eg, USD or EUR); commodities like gold or silver; stocks; or other cryptocurrencies. Stablecoins include mechanisms that maintain a low price deviation from their target price and so are useful to store or exchange value, as their built-in mechanisms remove the volatility.
https://iohk.io/en/blog/posts/2021/08/18/djed-implementing-algorithmic-stablecoins-for-proven-price-stability/
This is an exciting development, as it offers a path towards wide scale adoption for a much larger range of use cases. Formal verification also offers a much higher level of confidence that the Stablecoins will not be subject to security vulnerabilities such as the recent attacks against PolyMarket and many other other DeFi protocols.
The recently published white paper is available here.