Polkadot (DOT) is preparing to launch a new Stablecoin, PUSD, through the proposal of RFC-155. The Polkadot community defends PUSD as a key solution to unlock Defi’s potential, reduce reliance on USDT/USDC, and increase ecosystem autonomy.
However, some are concerned that past mistakes may be repeated. PUSD is an overly secured stubcoin deployed on Asset Hub and fully backed by DOT using the Honzon protocol developed by ACALA. Acala is the former publisher of AUSD and a miserably failed Stablecoin project.
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Can PUSD Stablecoin avoid the same fate as AUSD?
Reuse of Honzon – The framework that ACALA previously relied on issuing AUSD raises concerns. The incident erodes trust in the Acala team, with some people failing to properly compensate users and accusing them of “blaming the Hack.”
“The launch of Acala’s Stablecoin (AUSD) was a complete disaster and really killed my trust in the team. I don’t have any more support for my project. Honestly, I’m annoying it with all the talents in the polka dot/board space. – Shared community members.
Even those who support Polkadot launching its native Stablecoin view Honzon and Acala as lessons that cannot be ignored. They suggest that the project “goes forward independently from the ACALA team.” Additionally, they require that the Technical Council bear a clear responsibility for governance.
“These assurances make me ready to vote for aye. Without them, the risk of repeating past mistakes is too great,” another member pointed out.
There’s too much risk
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Aside from concerns about Honzon and the Acala team, PUSD at Polkadot faces skepticism within the community. One of the main reasons is the structure that the DOT supports.
The exact overload rate remains unknown, but this could cause liquidation to cause cascades and add sales pressure to the token. The PUSD model is safer than Terra’s UST due to its excessive materialization, but relies solely on DOT as collateral poses a significant risk.
Previously, Makerdao’s Dai also started as collateral for ETH only. But today, Makerdao supports Multicolatalal DAI (MCD). Users can back up DAI with crypto assets such as ETH, WBTC, Link, Uni, Steth, and even real-world assets (RWA).
“Only DOTs that could trigger a liquidation cascade and add additional sales pressure to the token are backed up. Remember the infamous Dai Depeg of 2020. A user of X commented.
Additionally, another X user pointed out that the Polkadot ecosystem already has more advanced native solutions like Hollar. The hydration runtime builds this Stablecoin, optimizes it for Appchains, positioning it as better than the Legacy AUSD architecture. Therefore, many argue that instead of repeating the “regular” EVM model, Polkadot should harness its own strengths. This allows for the creation of stable and safe solutions that are suitable for the ecosystem possibilities.
PUSD is undoubtedly a strategic move by polka dots, unlocking the possibilities of defi. If it proves safe and looks at widespread adoption in ecosystems, it could have great benefits. However, the ghost of AUSD’s failure continues to raise doubts within the community.
To avoid repeating the same mistake, polka dots need to work to dispel these lingering concerns. As reported by Beincrypto, the fact that DOT supply is closing at 2.1 billion could help promote ecosystem growth.
