A New Stablecoin Proposal

Over the weekend, Bryan Chen, co-founder and CTO of Acala, unveiled a proposal to develop a Polkadot-native stablecoin. The asset would be DOT-backed, algorithmic in design, and launched under the ticker pUSD.

According to Chen’s outline, the stablecoin would leverage Honzon, Acala’s decentralized stablecoin and collateralized debt position protocol. This framework is designed to lower Polkadot’s dependence on centralized stablecoins like Tether (USDT) and Circle’s USDC.

So far, more than three-quarters of the votes have been cast in favor of the idea. With over 24 days left before the vote concludes, around 1.4 million DOT — valued at roughly $5.6 million at $3.90 per token — has already been committed.

How Would pUSD Function?

The proposed pUSD would operate as an overcollateralized debt token backed by DOT. Additionally, a savings module is being considered, which would allow holders to lock their tokens and earn interest through stability fees.

Chen emphasized that the main goal is to enhance Polkadot’s financial infrastructure:

“Polkadot Hub should have a native DOT-backed stablecoin because people need it. Without it, we risk losing liquidity, utility, and security.”

Unlike centralized models, algorithmic stablecoins aim to maintain a fiat peg using on-chain assets and smart contracts, with economic incentives built into the system to stabilize the price.

The Debate Around Algorithmic Stablecoins

Algorithmic stablecoins remain a controversial topic, especially after the dramatic collapse of TerraUSD (UST), which took down its entire ecosystem. Despite this setback, such assets continue to attract interest due to their greater decentralization compared to centralized alternatives.

This model offers a more permissionless and less controllable design. Some industry voices even warn that algorithmic stablecoins could pave the way for so-called “dark stablecoins”, which might evade regulatory oversight and sanctions.

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Strategic Alliance Between Plume and World Liberty Financial

Plume, the EVM-compatible blockchain purpose-built for the next generation of RWA integration, has announced a strategic partnership with World Liberty Financial. The goal: to fast-track the multichain expansion of the USD1 stablecoin.

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Previously anchored to the Binance Smart Chain, USD1 now becomes a core reserve asset in the Plume ecosystem, backing its native stablecoin pUSD. This move empowers users to access institutional-grade RWA finance across Plume’s rapidly growing network.

USD1: A New Standard in Stablecoin Reliability

Redeemable 1:1 for the U.S. Dollar and backed fully by U.S. government money market funds and equivalents, USD1 avoids complex yield mechanisms, prioritizing clarity and institutional trust.

Chris Yin, CEO of Plume, highlighted, “Being selected by World Liberty Financial as their strategic multichain partner confirms our vision. With USD1 embedded into our infrastructure, we open up composable new use cases that reshape how RWAs interact with DeFi.”

A New Chapter for Yield and Collateralization

Following the launch of Plume’s mainnet — which debuted with over $250M in real-world asset value and 100,000+ wallets — USD1 now unlocks new yield opportunities within Nest, Plume’s flagship staking protocol. It also provides a stable form of collateral for RWA exposure.

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