Bryan Chen, co-founder and CTO of Acala, has introduced a proposal for a self-sustaining, native stablecoin called pUSD within the Polkadot ecosystem. This coin aims to reduce Polkadot's reliance on centralized external stablecoins like USDT and USDC.
Key Features and Rationale
- Issuance Mechanism: pUSD would be issued using Acala’s Honzon protocol, which relies on overcollateralized debt positions to maintain its peg.
- Built-in Incentives: The plan includes an optional savings feature, allowing users to lock tokens and earn yield from stability fees, creating a self-sustaining incentive model.
- Strategic Goal: Chen argues that a chain-issued stablecoin is necessary to secure liquidity and strengthen Polkadot's competitive position against other ecosystems that already have native stablecoins. The coin’s peg would be maintained through on-chain mechanisms and economic incentives, promoting a decentralized design.
- Early Support: Early governance voting shows strong momentum, with over 75% support and 1.4 million DOT (approximately $5.6 million) committed so far, though the voting window remains open for 24 more days.
Lingering Concerns
The proposal faces some skepticism due to the historical collapse of algorithmic stablecoins like TerraUSD (UST) in 2022. However, proponents contend that the benefits of censorship resistance and permissionless access make native, decentralized models essential for the future of decentralized finance (DeFi).
September 2025, Cryptoniteuae