Can MakerDAO, which has launched a new stablecoin, revive again by fully embracing decentralization?

According to the latest news, MakerDAO founder Rune Christensen stated on the X platform that, as a complement to NewStable, Maker plans to launch another fully decentralized stablecoin—PureDai—to meet the needs of users who prefer a purely decentralized vision. PureDai will be deployed solely on the Ethereum mainnet, operating with decentralized oracles, requiring no governance or other budgets, and will not need further upgrades or changes from the moment of its release, being completely independent of Maker.

Christensen further introduced the design and implementation details of PureDai. Features of PureDai include a floating target price and highly decentralized collateral (such as ETH and stETH). Users holding DAI will be able to upgrade their DAI to NewStable or PureDai, with the conversion to NewStable expected to be launched in the short term, while PureDai is anticipated to be released in a few years.

This new decentralized stablecoin, PureDai, aims to return to MakerDAO's original decentralized vision, fully leveraging the advantages of the Ethereum ecosystem to ensure its leading position in the decentralized space. Next, we will explore the technical features of PureDai and its potential impact on the decentralized finance ecosystem in detail.

What is the impact of MakerDAO's dual stablecoin strategy—Endgame plan on the market?

MakerDAO is one of the pioneers in the decentralized finance (DeFi) space, with its created stablecoin DAI holding an important position in the cryptocurrency market. The success of DAI lies in its unique over-collateralization mechanism, which allows it to maintain a relatively stable value. As the DeFi ecosystem evolves, MakerDAO continues to innovate, seeking better solutions to meet market demands.
In August 2022, the MakerDAO community approved the Endgame plan, which aims to enhance MakerDAO's growth, resilience, and participation by launching new tokens NewStable and NewGovToken. The core goal of the Endgame plan is to expand the supply of DAI to 100 billion or more while maintaining its decentralization and transparency. Through the SubDAO ecosystem, the Endgame plan offers users various options, allowing users with different needs to participate and create a virtuous cycle.
NewStable is a key component of the Endgame plan, serving as an upgraded version of DAI, focusing on mass adoption and support for real-world assets (RWA). NewStable still maintains a peg to the dollar but enhances its stability and yield by introducing RWA as reserve assets. Users can choose to upgrade their DAI to NewStable to enjoy new features and higher yields.

What are the characteristics of PureDai, a decentralized stablecoin launched by MakerDAO?

PureDai is another fully decentralized stablecoin launched by MakerDAO, designed to meet the needs of users who prefer a purely decentralized vision. Unlike NewStable, PureDai will not rely on any centralized asset support but will maintain its stability through an extremely decentralized mechanism. The design features of PureDai include:

1. Floating target price: PureDai will adopt a floating target price mechanism, meaning its value will fluctuate freely based on market demand and supply rather than being fixed to a specific currency.
2. Decentralized high-quality collateral: Only highly decentralized and well-validated collateral will be accepted, such as ETH and stETH.
3. Decentralized oracles: It relies on price data provided by decentralized oracles to ensure the transparency and resilience of the system.
4. Minimal governance: There is no budget or contributors, and no further upgrades or changes will be needed from the moment of release.
   The core advantages of PureDai include:
5. Mechanism of floating target price: The floating target price is one of the core features of PureDai. Since it cannot guarantee a long-term peg to the dollar, PureDai must achieve a freely floating anchoring mechanism. By introducing negative target interest rates, PureDai can lower prices in high-demand situations, thus maintaining some form of price stability. This mechanism is similar to other decentralized-first stablecoins, such as RAI and HAI.
6. Decentralized high-quality collateral: PureDai only accepts highly decentralized and well-validated collateral, primarily ETH and stETH. ETH is considered the ultimate decentralized collateral, while stETH enhances economic efficiency through Lido's decentralized infrastructure. The minimal governance of PureDai will allow for the removal of stETH if necessary and may introduce other liquid collateral ETH tokens that meet high standards.
7. Operation of decentralized oracles: PureDai relies on price data provided by decentralized oracles to ensure the transparency and resilience of the system. To achieve this, PureDai will maintain liquidity in three AMM pools: ETH/PureDai, stETH/PureDai, and NewStable/PureDai. These AMM pools will be used to generate time-weighted oracle prices, ensuring accurate collateral pricing in the system's liquidation calculations.
8. Governance token economics: PureDai will have its own governance token, with an initial supply of 2 billion. These governance tokens will be distributed to NewStable mining users over five years while being permanently distributed to PureDai treasury users to subsidize the generation of PureDai. The surplus of PureDai will be used to accumulate governance tokens through a smart burn engine. Additionally, governance tokens will also serve as a backup in the event of bad debts for PureDai.
9. Permanent issuance to PureDai treasury: To support the growth and demand of PureDai, users of the PureDai treasury will receive permanent issuance of governance tokens. This mechanism allows users to obtain governance tokens while paying higher stability fees, thereby incentivizing more users to participate in the generation and use of PureDai.
10. Minimal governance and immutability: A significant feature of PureDai is its minimal governance requirements and immutability. From the moment of release, PureDai will not require further upgrades or changes, meaning that the token will be completely independent of Maker and not subject to any centralized control. The decentralized oracles and minimal governance of PureDai ensure its leading position in the decentralized space.

PureDai will face market tests, and its future trends are worth paying attention to

With MakerDAO announcing the launch of PureDai, this brand new decentralized stablecoin project faces tremendous opportunities and challenges. As a product that returns to its original intention, PureDai aims to provide users with a truly decentralized financial tool through its floating target price, decentralized high-quality collateral, and minimal governance mechanism. This undoubtedly injects new vitality into the decentralized finance (DeFi) ecosystem.

The design of PureDai allows it to flexibly adjust between market demand and supply, maintaining price stability and system resilience. At the same time, the immutability and complete independence of PureDai ensure that it does not require further upgrades or changes after its release, greatly enhancing user confidence and security. Over time, PureDai will further consolidate its market position through its unique governance token economics and the incentive mechanism of permanent issuance to treasury users.
However, PureDai also faces multiple challenges both technically and in the market. First, how to effectively manage the floating target price to cope with market fluctuations is an issue that requires continuous exploration and optimization. Second, although the design of PureDai's decentralized collateral is highly attractive, ensuring the liquidity and value stability of the collateral in practice will be a significant test of the system's resilience.
Additionally, the launch of PureDai requires broad support and recognition within and outside the MakerDAO community. Community feedback and participation will be one of the key factors for the success of PureDai. MakerDAO needs to ensure that PureDai can meet user needs and play an important role in the decentralized finance ecosystem through continuous communication and improvement.
In summary, PureDai stands at a critical juncture filled with potential and challenges. Through technological innovation and market adaptability adjustments, PureDai is expected to achieve significant success in the decentralized finance field. However, balancing technological innovation with market demand while maintaining system stability and security will be key to PureDai's future development. For investors and users, this is a moment worth paying attention to and evaluating, as well as a test of the long-term commitment and confidence in the PureDai project.