As a seasoned analyst with years of experience navigating the complex and ever-evolving world of decentralized finance (DeFi), I find the recent move by MakerDAO to introduce NewStable (NST) and NewGovToken (NGT) intriguing. The strategic endgame plan, as it’s being called, aims to enhance user participation in governance and ensure regulatory compliance – two objectives that are often at odds in the DeFi space.
MakerDAO recently introduced NewStable (NST) and NewGovernance Token (NGT) with the aim of boosting user involvement in decision-making processes and adhering to regulatory requirements, all in line with their long-term strategic objectives.
Token Swap and Governance Structure
August 22 saw MakerDAO unveiling upgraded versions of its core digital assets: the DAI stablecoin and the MKR governance token. These revamped assets, labeled as NewStable (NST) and NewGovToken (NGT), are intended to boost user interaction and governance within the MakerDAO network.
In the freshly designed system, MKR tokens will be exchanged for NewGovToken (NGT) at a rate of 1 MKR equating to 24,000 NGT. This substantial shift aims to promote democratic governance by allowing a larger number of users to possess a substantial amount of the new token, thereby amplifying their control over the platform’s future trajectory. As stated by MakerDAO, this transition will stimulate increased engagement in governance matters, fostering a more inclusive decision-making process within the ecosystem.
The updated digital currency, NewStable (NST), is designed to keep a 1:1 correlation with Dai, ensuring the consistent stability that users have come to rely on. Furthermore, NST will be the sole stablecoin in the MakerDAO system providing returns, distinguishing it from the original DAI token, which progressively loses its capacity for generating yields.
Strategic Endgame Plan
In MakerDAO’s long-term strategic vision, they are integrating new tokens called NST and NGT. The goal is to make the platform more adaptable and increase user engagement. While the exact timeline for the complete rollout of this plan isn’t specified yet, it prioritizes user autonomy. Current DAI and MKR tokens will continue to function, giving users the option to either upgrade to NST and NGT or stick with their current tokens. This way, the ecosystem remains adaptable and sensitive to user decisions.
Although DAI offers some flexibility, it’s important to be aware that it may eventually no longer provide yield functions. This change could make switching to NST more attractive due to its potential benefits. MakerDAO has emphasized that this upgrade is optional, but the enhanced advantages significantly suggest considering the new tokens.
Rationale Behind NewStable
On May 15, 2024, Rune Christensen, co-founder of MakerDAO, introduced NewStable (NST). Christensen emphasized the dilemma DAI finds itself in, straddling two contrasting realms: striving for absolute decentralization and providing substantial utility and value at a large scale. He referenced the “Trilemma of Stablecoins,” which suggests that simultaneously maintaining a dollar peg, ensuring decentralization, and scaling a stablecoin is theoretically challenging due to their inherent conflicts.
He claims that NewStable can resolve this issue by focusing on mass adoption and ensuring compliance with regulatory requirements through Real-World Asset (RWA) backing. A future upgrade mechanism will allow NST to introduce a freeze function that aligns with legal frameworks in various jurisdictions.
Instead, it’s important to note that the rollout of this particular feature is contingent on the governance community, since it won’t be part of NST during its initial release.
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2024-08-23 18:11