Author: HAMSTER Source: ChainFeeds
Stablecoins face a trilemma in their design, balancing decentralization, stability, and scalability. Fully decentralized stablecoins often sacrifice price stability as they do not rely on any centralized asset support and instead determine prices through market supply and demand, which can lead to significant price fluctuations. On the other hand, stablecoins that prioritize stability often rely on centralized asset support, such as USD reserves, which sacrifices the original intention of decentralization and makes these stablecoins more susceptible to regulation and control by centralized institutions.
Scalability issues involve how to expand the user base and use cases while maintaining decentralization and stability. Many stablecoins have adopted partially centralized or compromised solutions to find a balance among these three factors. For example, some stablecoins ensure price stability by using USD reserves, but this also means they need to rely on centralized custodial institutions, which weakens their decentralized characteristics. In conclusion, finding the optimal balance between decentralization, stability, and scalability remains a major challenge in stablecoin design.
MakerDAO’s Endgame Plan
MakerDAO’s Endgame plan aims to address the aforementioned dilemma by introducing two new stablecoins, PureDai and NewStable. Founder Rune Christensen proposes that this plan attempts to balance decentralization with the demands of real-world use cases by separating different stablecoin paths. PureDai will serve as a fully decentralized stablecoin, while NewStable will focus on growth and yield.
NewStable: Combining RWA as collateral to provide additional stability and yield
NewStable is a new type of stablecoin introduced by MakerDAO in its Endgame plan to address the balance between decentralization, stability, and scalability. Unlike DAI, NewStable focuses on growth, yield, and resilience by combining RWA to provide additional stability and yield, while also being USD-pegged and introducing freezing functions to enhance security and compliance.
NewStable offers a stablecoin option with enhanced stability and security supported by RWA, such as real estate. These RWAs not only provide additional sources of income and enhance stablecoin stability but can also increase security through freezing functions when necessary. Additionally, NewStable is designed with upgradability, allowing the addition of industry-standard freezing functions through governance voting in the future, which is commonly used in other major RWA-supported stablecoins to adapt to legal requirements in jurisdictions and provide higher security and stability on a global scale.
Existing DAI users can seamlessly upgrade to NewStable (this feature will be introduced in the short term), which maintains the freedom of conversion between DAI and NewStable, ensuring the protection of existing users’ interests while also attracting new users. DAI will continue to be USD-pegged and allow users to convert it back to NewStable at any time. During the initial transition period, the DAI Savings Rate (DSR) will be gradually phased out, and future returns will mainly be realized on NewStable. Meanwhile, DAI will continue to serve as the liquidity backend for NewStable, ensuring a smooth user experience and increasing flexibility and convenience through instant 1:1 conversions.
The launch of NewStable is accompanied by a new governance token called NewGovToken, which will enhance the governance process of MakerDAO and increase participation. Holders can earn income by participating in governance and locking tokens, incentivizing long-term participation. To improve scalability, MakerDAO will introduce NewBridge, a new Layer 2 solution that connects all MakerDAO ecosystem tokens. NewBridge will reduce transaction costs, improve user experience, and promote cross-chain compatibility, enabling better integration of NewStable into a wide range of blockchain ecosystems.
PureDai: Using only stETH as collateral, not pegged to USD
PureDai is a fully decentralized stablecoin introduced by MakerDAO in its Endgame plan. Unlike Dai, which includes centralized assets such as USDC, PureDai excludes these assets and only uses ETH and ETH staked in Lido (stETH) as collateral, with a freely floating target price instead of direct USD pegging. This design aims to enhance decentralization and flexibility, meeting the needs of users who prioritize these principles and ensuring it is not controlled by a single entity.
To avoid reliance on centralized data sources, PureDai obtains price information through decentralized oracles. Additionally, PureDai adopts minimal governance and simple token economics, incentivizing users to hold tokens long-term and promoting supply-side growth. Holders can earn income by participating in governance and locking tokens, further enhancing the system’s decentralization and community engagement.
The primary source of income for PureDai is the interest earned from collateralizing ETH and stETH, which supports its value and provides stability and resilience in market fluctuations. According to the latest information, PureDai is expected to launch in the coming years and will operate on the Ethereum mainnet. Once launched, PureDai will be immutable and will not require further upgrades or modifications.
Summary
PureDai represents MakerDAO’s return to the original intention of decentralization, while NewStable provides guarantees for widespread adoption and compliance. Through this dual-track strategy, MakerDAO can meet the needs of different users. Of course, the transition from Dai to PureDai and NewStable will be gradual, and as users gradually migrate to the new stablecoins, Dai will eventually be phased out.
