DAI Major Upgrade: Maker Launches Two Stablecoins Simultaneously Meeting Regulatory and Decentralized Needs
MakerDAO founder Rune Christensen announced on Twitter that there will be a major upgrade to the DAI stablecoin. In the future, the ecosystem will have two types of stablecoins: NewStable (name to be determined), which will comply with regulatory requirements, and PureDai (name to be determined), which will align with decentralized principles.
The contradiction of stablecoins lies in their need to be pegged to the US dollar while maintaining decentralization. It is impossible to achieve both on a large scale. The main challenge for DAI stablecoin at present is the difficulty of achieving compliance while embracing decentralization. Efforts to generate profits through Real World Assets (RWA) require additional compliance measures that the nature of tokens cannot meet.
Rune believes there are two paths to resolve this contradiction. One is to prioritize utility and scalability by pegging to the US dollar and integrating real-world assets. This requires integration with traditional finance (TradFi) and compliance with regulatory requirements. The other path is to pursue pure decentralization, which requires an independent architecture and design that is not linked to centralized control.
MakerDAO will not choose one path over the other but will create two stablecoins that serve different purposes. The future will see the introduction of NewStable, which will focus on compliance and adoptability, and PureDai, which will prioritize decentralization. NewStable will integrate with RWAs and traditional financial businesses and will have the ability to freeze transfers to comply with regulatory requirements. PureDai, on the other hand, will be completely independent of MakerDAO’s control and will only be issued on the Ethereum network.
Dai holders will have the option to upgrade their Dai to either NewStable or PureDai. The transition period will last about a year, after which the savings rate (DSR) for Dai will gradually close, and the benefits will only be given to NewStable. NewStable will continue to be governed by MakerDAO.
PureDai will be a return to the ideology of decentralization and will only be backed by decentralized collateral such as ETH and stETH. It will have a freely floating benchmark price and a highly decentralized oracle mechanism. PureDai’s contract will be released in its final immutable form to minimize legal compliance risks and satisfy the principles of censorship resistance and decentralization. PureDai will be deployed only on the Ethereum mainnet, but may be supported by certain Layer2 and cross-chain bridges in the future.
Dai holders will be able to upgrade to either NewStable or PureDai, or continue holding Dai. They can also convert between Dai, NewStable, and PureDai on a one-to-one basis. As more users and applications migrate to NewStable and PureDai, Dai is expected to be phased out. The timeline for this will depend on the adoption rate of NewStable and PureDai in the ecosystem.
More updates are expected in the coming weeks.
