- The new stablecoins are meant to eventually take the place of DAI and are a part of MakerDAO’s contentious Endgame plan.
Achieving equilibrium in decentralization is the ultimate goal of MakerDAO. At least in the opinion of Rune Christensen, the creator of the protocol.
On May 15, Christensen announced NewStable and PureDAI, two new stablecoins that represent the current phase of the Endgame. The goal of both tokens is to eventually take the position of DAI, which is now ranked third in the sector with a $5.4 billion market valuation.
Christensen noted in a piece titled Reconciling the two opposed approaches for Decentralized Stablecoins that Dai has been straddling two worlds since it began scaling. The culture of absolute decentralization, popularized by Bitcoin, is one globe.
The other is the ambition to achieve DAI’s initial goal of providing usefulness and value to actual people on a large scale.
Christensen went into more detail on the stablecoin trilemma, which holds that it is impossible to be totally decentralized, scale to vast levels, and have a stable peg at the same time.
He advocates for two choices. In the first, a dollar peg backed by real-world assets (RWA) is selected as collateral, giving priority to scalability and utility. He said that the second requires total freedom from any kind of centralized authority.
According to Christensen, attaining both is now feasible with the introduction of NewStable and PureDAI.
NewStable and PureDAI: what are they?
The primary DAI replacement, NewStable, will be centered on growth, yield, and resilience.
But after the new branding is finished later this year, its name will be disclosed. The coin will be connected to Maker but take over the RWA portion of MakerDAO, an area that has had tremendous growth in the last year.
It will feature a brand-new freeze function that is “similar to the industry standard of other RWA-backed stablecoins,” but not before it must pass a governance procedure.
Consumers who are unsure about DAI can rest comfortable knowing that the token will function normally and that they have the option to upgrade to NewStable.
A Reversion to Ideological Foundations and PureDAI
Christensen claims that PureDAI represents a return to the project’s original ideals, which are still held dear by OG community members and cypherpunk idealists in the Ethereum community.
He detailed PureDAI’s operations in a lengthy post on May 17, but he also revealed an odd roadmap: the token won’t be ready for deployment for years.
However, its primary characteristics are as follows: a target price that is free to fluctuate; collateral that is “only very decentralized” through ETH and staked ETH (stETH); maximally decentralized oracles; minimal governance (no contributors or budgets); permanent placement on Ethereum’s mainnet; and what he considers to be straightforward tokenomics that will support supply-side growth for stablecoins.
Christensen also outlined the tokenomics and mechanics of PureDAI. The “minimum governance structure” of PureDAI is called into question by the initial “genesis supply” of 2 billion governance tokens, which will be dispersed in batches of 400 million over a five-year period.
The creator of Maker did clarify, though, that those governance tokens will have a burn mechanism.
The possibility to experiment with tokenomics made possible by Maker’s Endgame strategy is what makes PureDAI special. The idea is to offer permanent emissions, which might allow PureDAI demand and growth to reach higher levels without ever needing to go back to a negative rate, according to Christensen.
In regards to other fully decentralized stablecoins, Christensen has invited the community to share important details, particularly “observations about how their mechanics perform in the wild after launch.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
