Polkadot (DOT) is getting ready to launch a brand new stablecoin, pUSD, by the RFC-155 proposal. The Polkadot group is championing pUSD as a key answer to unleash its DeFi potential, reduce dependence on USDT/USDC, and enhance ecosystem autonomy.
Nonetheless, some are involved that they may repeat previous errors. pUSD is an over-collateralized stablecoin totally backed by DOT, deployed on Asset Hub, and utilizing the Honzon protocol developed by Acala. Acala is the previous issuer of aUSD, a stablecoin venture that failed disastrously.
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Can pUSD Stablecoin Keep away from the Similar Destiny as aUSD?
Reusing Honzon – the framework Acala beforehand relied on to challenge 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 a complete disaster and it really killed my trust in the team. I don’t see myself supporting their project anymore. What I’d love to see is a proper, reliable, native solution. Honestly, it’s frustrating that with all the talent in the Polkadot/Substrate space, nobody has managed to build something better yet.” – A group member shared.
Approval price of the proposal on the time of writing. Supply: Polkadot
Even those that help Polkadot launching its native stablecoin nonetheless see Honzon and Acala as classes that can not be ignored. They suggest the venture ought to “move forward independently from the Acala team.” As well as, they name for the Technical Council to take clear accountability for governance.
“With these assurances, I would be prepared to vote AYE. Without them, the risk of repeating past mistakes is too great.” 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 inside the group. One major cause 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 important dangers.
Beforehand, MakerDAO’s DAI additionally began as ETH-only collateral. However at present, MakerDAO helps Multi-Collateral DAI (MCD). They permit customers to again DAI with crypto property reminiscent of ETH, WBTC, LINK, UNI, stETH, and even Actual World Property (RWAs) like US Treasuries.
“Backed only by DOT, which could trigger liquidation cascades and add additional selling pressure on the token. Remember the notorious DAI depeg in 2020, which forced 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 an alternative of repeating a “regular” EVM mannequin, Polkadot ought to leverage its distinctive strengths. This could allow the creation of a secure, safe answer worthy of its ecosystem’s potential.
pUSD is undoubtedly a strategic transfer by Polkadot to unlock DeFi potential. It may convey important advantages if it proves safe and sees widespread adoption within the ecosystem. Nonetheless, the ghost of aUSD’s failure continues to forged doubt inside 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 progress.
