MakerDAO has introduced NewStable (NST) and NewGovToken (NGT) to enhance user participation in governance and ensure regulatory compliance as part of its strategic endgame plan.
Token Swap and Governance Structure
On August 22, MakerDAO announced the introduction of enhanced versions of its key digital assets: the DAI stablecoin and the MKR governance token. The new assets, named NewStable (NST) and NewGovToken (NGT), aim to improve user engagement and governance within the MakerDAO ecosystem.
In the newly proposed framework, MKR tokens will be swapped for NewGovToken (NGT) at a ratio of 1:24,000. This significant adjustment is designed to democratize governance by enabling more users to hold a meaningful quantity of the new token, thus increasing their influence over the platform’s future direction. According to MakerDAO, this change will encourage broader participation in governance activities, ensuring that the ecosystem’s decision-making process becomes more inclusive.
The revamped stablecoin, NewStable (NST), will maintain a 1:1 peg with Dai, continuing the stability that users expect. It will also be the only stablecoin within the MakerDAO ecosystem offering yield, setting it apart from the original DAI token, which will gradually lose its yield-generating capabilities.
Strategic Endgame Plan
The introduction of NST and NGT is part of MakerDAO’s broader strategic endgame plan, which seeks to enhance the platform’s adaptability and user participation. Although specific dates for the full implementation of this plan have not been disclosed, the strategy emphasizes user choice. Existing DAI and MKR tokens will remain operational, allowing users to choose whether to upgrade to NST and NGT or retain their original tokens. This approach ensures that the ecosystem remains flexible and responsive to user preferences.
Despite this flexibility, users should note that DAI will eventually lose its yield functionality, further incentivizing the transition to NST. MakerDAO has underscored that the upgrade is optional, but the shifting benefits strongly encourage adopting the new tokens.
Rationale Behind NewStable
MakerDAO co-founder Rune Christensen first proposed NewStable (NST) on May 15, 2024. Christensen highlighted the challenges faced by DAI, which he described as being caught between two conflicting worlds: the pursuit of pure decentralization and the need to deliver tangible utility and value at scale. He pointed to the “Stablecoin Trilemma,” which posits that achieving a dollar peg, maintaining decentralization, and scaling a stablecoin simultaneously is inherently problematic.
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.
However, the decision to implement this feature lies in the hands of the governance community, as it will not be available at NST’s initial launch.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
