MakerDAO Founder Unveils Two New Stablecoins

Reconciling decentralization is the aim of MakerDAO’s endgame. At least according to the protocol’s founder, Rune Christensen.

The latest phase of the Endgame was unveiled on May 15, when Christensen unveiled two new stablecoins: NewStable and PureDAI. Both tokens are meant to eventually replace DAI, which currently commands a $5.4 billion market cap, placing it in third overall for the sector.

“From the moment Dai started scaling, it has been straddling two worlds,” wrote Christensen in a post titled Reconciling the two opposing paths for Decentralized Stablecoins. “One world is the culture of pure decentralization as introduced with Bitcoin. The other is the desire to fulfill the original purpose of DAI by delivering utility and value to real people at scale.”

Christensen elaborated on the idea of the stablecoin trilemma, which claims that maintaining a stable peg while also being fully decentralized and scaling to large sizes, is not feasible.

He promotes two options. The first prioritizes utility and scale by choosing a dollar peg backed by real-world assets (RWA) as collateral. The second, he wrote, demands complete independence from any sort of centralized control.

With the unveiling of NewStable and PureDAI, achieving both is now possible, argues Christensen.

What are NewStable and PureDAI?

NewStable will be the main successor to DAI focused on growth, yield and resilience.

However, its name will be revealed later this year once the new branding is complete. The token will take over the RWA aspect of MakerDAO (a sector that has been gaining significant traction over the past year) while remaining attached to Maker.

It will introduce a novel freeze function “similar to the industry standard of other RWA-backed stablecoins,” although it will have to go through a governance process beforehand.

Users wondering about DAI can sleep easy knowing that the token will continue to operate as is but can opt to be upgraded to NewStable.

PureDAI and a Return to Ideological Roots

According to Christensen, PureDAI is a return to the project’s ideological roots, one he says is supported by OG community members and cypherpunk idealists who continue to exist in the Ethereum space.

In a lengthy May 17 post, he outlined how PureDAI will operate, although he let out a somewhat strange roadmap: the token won’t be ready to launch for years to come.

Nevertheless, its main features include a free-floating target price, “only very decentralized” collateral through ETH and staked ETH (stETH), maximally decentralized oracles, minimal governance (no budgets or contributors), permanent location on Ethereum’s mainnet, and what he deems simple tokenomics that will promote stablecoin supply-side growth.

Christensen also highlighted how PureDAI’s mechanics and tokenomics will work. An initial “genesis supply” of 2 billion PureDAI governance tokens — which calls into question its “minimal governance structure”— will be distributed in batches of 400 million over five years.

Maker’s founder did explain, however, that there will be a burn mechanism for those governance tokens.

What’s unique is that PureDAI offers the opportunity to experiment with tokenomics brought to life by Maker’s Endgame plan. The plan is to provide permanent emissions, which, according to Christensen, might support a greater level of PureDAI demand and growth without ever having to return to a negative rate.

Christensen has called for the community to provide input about key features regarding other pure decentralized stablecoins, especially “observations about how their mechanics perform in the wild after launch.”