Read about PureDai, a new stablecoin launched by MakerDAO

Original author: BlockTempo

MakerDAO founder Rune Christensen spoke further at X about the design and implementation details of its new stablecoin, PureDai. PureDai aims to be a completely Decentralization stablecoin, with features such as floating target prices and highly Decentralization Collateral.

Protocol Decentralization lending protocol Rune Christensen, founder of MakerDAO, following yesterday’s announcement of plans for a new stablecoin in two different directions, NewStable and PureDai in the Endgame program, today further introduced his thoughts and principles on the design and implementation of PureDai on X.

The details of NewStable (NST) were reported on the 4th, which will be an upgraded version of Dai, so it still focuses on the stable peg with the US dollar, with RWA as a reserve asset, and Dai holders can choose whether they want to upgrade to NST.

What is PureDai?

Returning to PureDai, Rune said that its goal is to achieve an idealized Dai, the “true Decentralization” stablecoin that the veterans of the Xu long Maker community (OG) and Ethereum the broader cyberpunk vision and idealists aspire to.

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

1. Floating Target Price

2. Decentralization of high-quality Collateral: Only accept extremely Decentralization and fully verified Collateral (e.g. ETH, STETH). In addition, PureDai will launch a lending platform to maximize the supply of PureDai.

3. Oracle Machine with high decentralization

4. Minimal governance: No budget, no contributors.

5. Permanently positioned in Ethereum Mainnet: Layer 2 solutions and bridge are maintained by the community.

6. Simple tokenomics: Promote the rise of the supply side of stablecoins.

In addition, the name of PureDai is only tentative at this time, and the final name will be finalized based on input from the community and future users.

Floating price target

The most important feature of PureDai is the ability to achieve a floating target price, and since there is no guarantee of a long-term peg to the US dollar, PureDai must achieve a free-floating peg as it is not possible to use RWA (real world assets) to drop prices on a large scale when demand exceeds supply.

In order to maintain price stability, Rune points to the need to introduce a negative target Intrerest Rate (meaning that the cost of holding stablecoin increases) in response to a situation where persistently high demand exceeds supply, which will cause the target price to fall over time, thus theoretically maintaining some form of price stability, but this does not guarantee a fixed ratio to any specific coin. This is the mechanism employed by Decentralization stablecoin RAI, HAI, etc.

Rune said that while existing Dai will remain pegged to the US dollar, users will have the option to upgrade to PureDai to enjoy its extreme decentralization and resilience.

PureDai governance token economics

Just as NewStable has its own governance token (code name NewGovToken, NGT), PureDai will also have its own governance token (PureDai Governance Token), which has the following characteristics:

The initial supply is 2 billion

• The initial supply will be distributed in the NewStable Mining on Ethereum Mainnet for a period of five years
• Permanently distributed to PureDai vaults users to subsidize the generation of PureDai
• PureDai’s surplus will be used to accumulate governance tokens, which are realized through the Burn (Smart Burn Engine).
• Governance tokens act as a backstop in the event of bad debts on PureDai

The governance token initial supply of PureDai will be distributed to NewStable users on the Ethereum Mainnet for Token of 400 million per year for a period of five years (subject to adjustment). According to Rune, this will help incentivize the Maker community to develop and release PureDai and ensure that governance token owners are widely distributed. PureDai will not become a SubDAO, its governance structure will be completely independent of Maker, and there will be no permanent Token release in Maker’s favor.

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