What's Innovative About PureDai, MakerDAO's New Stablecoin?

Decentralized lending protocol MakerDAO’s founder, Rune Christensen, continues to unveil details about the NewStable and PureDai projects, two distinct stablecoin initiatives within the Endgame plan, as announced yesterday. Today on X, he further elaborated on the design and principles behind PureDai’s development and implementation.

Earlier, Dynamic Zone reported details about NewStable (NST), which serves as an upgraded version of Dai, thus maintaining its peg to the US dollar. NST is backed by Real World Assets (RWA), and Dai holders have the option to upgrade to NST.

What is PureDai?

Returning to PureDai, Rune stated that its goal is to realize an idealized Dai, which is desired by many Maker community veterans (OG) and broader Ethereum cypherpunk visionaries and idealists as a “truly decentralized” stablecoin.

To achieve this goal, Rune designed PureDai in an uncompromising manner, with the following features:

1. Floating target price
2. Decentralized high-quality collateral: Only extremely decentralized and thoroughly verified collateral (such as ETH, STETH) is accepted. Additionally, PureDai will launch a lending platform to maximize PureDai’s supply.
3. Highly decentralized oracle
4. Minimal governance: No budget, no contributors.
5. Permanently positioned on the Ethereum mainnet: Layer 2 solutions and bridging are maintained by the community.
6. Simple token economics: Facilitating growth on the stablecoin supply side.

Furthermore, the name PureDai is currently provisional, and the final name will be determined based on feedback from the community and future users.

Floating Target Price

The most significant feature of PureDai is its ability to achieve a floating target price. Because it cannot guarantee a long-term peg to the US dollar, PureDai must implement a freely floating anchoring mechanism. In cases of high demand exceeding supply, it’s not feasible to extensively utilize Real World Assets (RWA) to lower the price.

To maintain price stability, Rune emphasized the necessity of introducing negative target interest rates (meaning the cost of holding the stablecoin increases) to address sustained high demand surpassing supply. This would cause the target price to decrease over time, theoretically maintaining some form of price stability, but without guaranteeing a fixed ratio to any specific currency. This mechanism is adopted by decentralized stablecoins like RAI, HAI, among others.

Rune noted that although existing Dai will maintain its peg to the US dollar, users have the option to upgrade to PureDai to enjoy its extremely high level of decentralization and resilience.

PureDai Governance Tokenomics

Similar to NewStable having its governance token (code-named NewGovToken, NGT), PureDai will also have its governance token (PureDai Governance Token), which will possess the following characteristics:

• Initial supply of 2 billion tokens
• Initial supply will be distributed through mining on the Ethereum mainnet’s NewStable platform, over a period of five years
• Permanently distributed to PureDai vaults users to subsidize PureDai generation
• Surplus from PureDai will be used to accumulate governance tokens, achieved through burning (Smart Burn Engine)
• Governance tokens act as a backstop in the event of defaults in PureDai

The initial supply of governance tokens for PureDai will be allocated to users of NewStable on the Ethereum mainnet, with 400 million tokens distributed annually over five years (subject to adjustments). Rune stated that this helps incentivize the Maker community to develop and release PureDai while ensuring widespread distribution of governance token ownership. PureDai will not become a SubDAO; its governance structure will be entirely independent of Maker, with no permanent token releases benefiting Maker.

Statement:

1. This article is reprinted from [blocktempo], the original title is “The new stablecoin launched by MakerDAO PureDai, what’s so innovative?” The copyright belongs to the original author [DaFi Weaver], if you have any objection to the reprint, please contact Gate Learn Team, the team will handle it as soon as possible according to relevant procedures.

2. Disclaimer: The views and opinions expressed in this article represent only the author’s personal views and do not constitute any investment advice.

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