What is the innovation of PureDai, the new stablecoin launched by MakerDAO?

2024-05-17 15:54

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Original title: "What is MakerDAO's new stablecoin PureDai? No guarantee of being pegged to the US dollar, introducing floating prices, and having new governance tokens..."

Original source: BlockTempo

MakerDAO founder Rune Christensen further introduced the design and implementation details of its new stablecoin PureDai at X. PureDai aims to be a fully decentralized stablecoin, with main features including floating target prices and highly decentralized collateral.

(Previous: "MakerDAO: New stablecoin NST and governance token NGT will be launched soon, which can be converted into DAI and MKR")

(Background supplement: "DeFi doomsday? MakerDAO founder: DeFi front-end may need to be registered and licensed in Europe to operate")

After Rune Christensen, the founder of the decentralized lending protocol MakerDAO, announced yesterday about the two new stablecoin plans in the Endgame plan, NewStable and PureDai, he further introduced his ideas and principles for the design and implementation of PureDai on X today.

On the 4th, the Dynamic Zone reported the details of NewStable (NST), which will be an upgraded version of Dai, so it still focuses on the stable peg with the US dollar, with RWA as the reserve asset, and Dai holders can choose whether to upgrade to NST.

What is PureDai?

Back to PureDai, Rune said that its goal is to achieve an idealized Dai, which is the "truly decentralized" stablecoin desired by many veterans (OGs) of the Maker community and the broader Ethereum cyberpunk vision and idealists.

To achieve this goal, Rune designed PureDai in an uncompromising way, which has the following characteristics:

1. Floating target price

2. Decentralized high-quality collateral:Only extremely decentralized and well-verified collateral (such as ETH, STETH) is accepted. In addition, PureDai will launch a lending platform to maximize the supply of PureDai.

3. Highly decentralized oracle

4. Minimal governance:No budget, no contributors.

5. Permanent positioning on the Ethereum mainnet:The second-layer solution and bridge are maintained by the community.

6. Simple token economics:Promote the growth of the stablecoin supply side.

In addition, the name of PureDai is currently only tentative, and the final name will be finalized based on the opinions of the community and future users.

Floating Target Price

The most important feature of PureDai is the ability to achieve a floating target price. Since it is not possible to guarantee a long-term peg to the US dollar, PureDai must achieve a free-floating anchor because RWA (real-world assets) cannot be used on a large scale to reduce prices when supply exceeds demand.

In order to maintain price stability, Rune pointed out that a negative target rate (meaning that the cost of holding stablecoins will increase) needs to be introduced to cope with the situation where continued high demand exceeds supply, which will cause the target price to fall over time, thereby theoretically maintaining some form of price stability, but this does not guarantee a fixed ratio with any specific currency. This is the mechanism adopted by decentralized stablecoins such as RAI and HAI.

Rune said that while the existing Dai will remain pegged to the US dollar, users can choose to upgrade to PureDai to enjoy its extremely high decentralization and resilience.

PureDai Governance Token Economics

Just as NewStable has its own governance token (codenamed NewGovToken, NGT), PureDai will also have its own governance token (PureDai Governance Token) with the following characteristics:

· The initial supply is 2 billion

· The initial supply will be allocated in NewStable mining on the Ethereum mainnet for a period of five years

· Permanently distributed to PureDai vaults users to subsidize the generation of PureDai

· PureDai’s surplus will be used to accumulate governance tokens, which will be achieved through burning (Smart Burn Engine)

· Governance tokens serve as a backstop when PureDai has bad debts

PureDai’s initial supply of governance tokens will be distributed to NewStable users on the Ethereum mainnet, 400 million tokens per year for five years (subject to adjustment). Rune said this will help incentivize the Maker community to develop and release PureDai and ensure that the owners of governance tokens are widely distributed. PureDai will not be a SubDAO, its governance structure will be completely independent of Maker, and there will be no permanent token release in favor of Maker.