MakerDAO Plans to Launch New Fully Decentralized Stablecoin "PureDai" to Replace DAI

MakerDAO has announced plans to launch PureDai, a fully decentralized stablecoin, as a replacement for the current DAI, utilizing ETH and stETH as collateral.

MakerDAO Plans to Launch New Fully Decentralized Stablecoin "PureDai" to Replace DAI

Rune Christensen, the founder of MakerDAO, revealed on Twitter the plan to launch PureDai, a new fully decentralized stablecoin.

According to Christensen, the launch of PureDai aims to cater to users who prefer a fully decentralized vision. Current DAI holders will have the option to upgrade to PureDai when it becomes available in the coming years.

Rune Christensen announces PureDai on Twitter. Source: Twitter (16/05/2024)

Key Differences and Features:

• Exclusivity to Ethereum: PureDai will operate solely on the Ethereum mainnet, unlike DAI, which is available on multiple blockchains.
• Collateral: PureDai will use ETH and stETH (staked ETH on Lido Finance) as collateral, differing from DAI's diverse collateral types.
• Decentralized Oracles: PureDai will rely entirely on decentralized oracles for asset valuation, eliminating dependence on centralized data sources.
• Free-Floating Exchange Rate: Unlike DAI, PureDai will not be pegged to the US dollar. Its exchange rate mechanism will resemble that of RAI, a stablecoin from Reflexer Labs, which is solely backed by Ether and uses an algorithm to maintain price stability.

Future of DAI and Introduction of NewStable:

Alongside PureDai, MakerDAO will introduce another stablecoin called NewStable, which will serve as a direct upgrade to the current DAI while retaining its existing features. NewStable will focus primarily on regulatory compliance and supporting Real World Assets (RWA).

In the future, DAI holders will have the option to upgrade their DAI to either NewStable or PureDai at a 1:1 ratio and can switch between them at any time. The transition to NewStable is expected to occur soon, while PureDai's launch is anticipated to be several years away.

Eventually, after the implementation of PureDai and NewStable, the DAI stablecoin will be phased out. This transition will depend on the adoption rate of NewStable and PureDai within the MakerDAO ecosystem.

MakerDAO's Endgame Plan and Governance Changes:

Rune Christensen also reiterated the first phase of the Endgame Plan, which includes rebranding MakerDAO and converting MKR tokens into NewGovToken (NGT):

• New Governance Model: Representing a new governance method within the ecosystem.
• Encouraging Participation: Incentivizing widespread participation and more flexible decision-making.
• Token Conversion: Each MKR token can be converted into 24,000 NGT, allowing easy conversion between MKR and NGT.
• Increased Supply: This revaluation aims to increase MKR's supply, reducing the token price to enable users to hold a significant number of tokens for governance participation and influence.

The announcement of PureDai comes as DAI's supply has surged since early March, amid the growing usage of competing stablecoins like USDT and USDC.

Current Stablecoin Market:

Data shows that the total supply of USDT, including authorized but not yet issued tokens, has surpassed $100 billion. USDC follows with $35 billion. DAI, FDUSD, and Ethena's stablecoin USDe hold the third, fourth, and fifth positions with $5.47 billion, $3.81 billion, and $2.31 billion, respectively.

Key Highlights:

• PureDai Launch: A fully decentralized stablecoin using ETH and stETH as collateral.
• Transition Options: DAI holders can upgrade to PureDai or NewStable at a 1:1 ratio.
• Endgame Plan: Rebranding MakerDAO and converting MKR to NewGovToken (NGT).
• Stablecoin Market: Rapid growth of DAI's supply amid competition from USDT and USDC.

This strategic move by MakerDAO underscores its commitment to decentralization and regulatory compliance, while also adapting to the evolving landscape of the stablecoin market.