Polkadot (DOT) is getting ready to launch a brand new stablecoin, pUSD, by way of the RFC-155 proposal. The Polkadot group is championing pUSD as a key answer to unleash its DeFi potential, minimize dependence on USDT/USDC, and enhance ecosystem autonomy.
Nonetheless, some are involved that they may repeat previous errors. pUSD is an over-collateralized stablecoin absolutely backed by DOT, deployed on Asset Hub, and utilizing the Honzon protocol developed by Acala. Acala is the previous issuer of aUSD, a stablecoin challenge that failed disastrously.
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Can pUSD Stablecoin Keep away from the Identical Destiny as aUSD?
Reusing Honzon – the framework Acala beforehand relied on to problem aUSD is elevating issues. That incident eroded belief within the Acala crew, with some even accusing them of “blaming a hack” whereas failing to compensate customers adequately.
“Acala’s stablecoin (aUSD) launch was an entire catastrophe and it actually killed my belief within the crew. I don’t see myself supporting their challenge anymore. What I’d like to see is a correct, dependable, native answer. Actually, it’s irritating that with all of the expertise within the Polkadot/Substrate house, no person has managed to construct one thing higher but.” – A group member shared.
Even those that help Polkadot launching its native stablecoin nonetheless see Honzon and Acala as classes that can’t be ignored. They suggest the challenge ought to “transfer ahead independently from the Acala crew.” As well as, they name for the Technical Council to take clear accountability for governance.
“With these assurances, I might be ready to vote AYE. With out them, the chance of repeating previous errors is simply too nice.” One other member famous.
Too Many Dangers
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Setting apart issues about Honzon and the Acala crew, Polkadot’s pUSD additionally faces skepticism throughout the group. One main motive is the construction that DOT solely backs it.
Whereas the precise overcollateralization ratio stays unclear, this might set off liquidation cascades and add promoting strain on the token. Though the pUSD mannequin is safer than Terra’s UST as a result of it’s overcollateralized, relying solely on DOT as collateral introduces vital dangers.
Beforehand, MakerDAO’s DAI additionally began as ETH-only collateral. However immediately, MakerDAO helps Multi-Collateral DAI (MCD). They permit customers to again DAI with crypto belongings resembling ETH, WBTC, LINK, UNI, stETH, and even Actual World Property (RWAs) like US Treasuries.
“Backed solely by DOT, which may set off liquidation cascades and add extra promoting strain on the token. Keep in mind the infamous DAI depeg in 2020, which pressured MakerDAO to diversify its collateral.” A consumer on X commented.
Moreover, one other X consumer identified that the Polkadot ecosystem already has extra superior native options like HOLLAR. The Hydration runtime builds this stablecoin, optimizes it for appchains, and positions it as superior to the legacy aUSD structure. Due to this fact, many argue that as a substitute of repeating a “common” EVM mannequin, Polkadot ought to leverage its distinctive strengths. This is able to allow the creation of a steady, safe answer worthy of its ecosystem’s potential.
pUSD is undoubtedly a strategic transfer by Polkadot to unlock DeFi potential. It may convey vital advantages if it proves safe and sees widespread adoption within the ecosystem. Nonetheless, the ghost of aUSD’s failure continues to forged doubt throughout the group.
To keep away from repeating the identical errors, Polkadot should work to dispel these lingering issues. The truth that the DOT provide is capped at 2.1 billion, as reported by BeInCrypto, may assist gas the ecosystem’s development.