Polkadot DEX Polkastarter is set to enjoy an action-packed week after launching on December 15. Three Initial Dex Offerings (IDOs) are lined up, with the pick of the bunch coming courtesy of MahaDAO. The crypto collateralization and lending platform, set to go live in January, will be making its MAHA governance token available to early supporters.
During the course of the IDO, scheduled for December 17, $125,000 of ETH will be raised in a fixed price sale. $50,000 of this will be exclusively available to POLS token holders, POLS being the native Polkastarter token. POLS is up 130% over the last month, as anticipation for the launch of the Polkadot-based DEX grows. Upon completion of the MahaDAO IDO, the MAHA token will be listed on Uniswap, with $300,000 of initial liquidity supplied.
Two Tokens, One DAO
Like MakerDAO, MahaDAO will operate a two-token system, with MAHA being the governance token and ARTH the stable token that can be minted. Unlike Maker’s DAI, however, ARTH is not designed to maintain a dollar peg. Rather, the token has been described as a "valuecoin" that maintains its purchasing power.
This is achieved by periodically rebalancing the assets held in the MahaDAO vault, comprising a mixture of fiat currency, gold and a small percentage of BTC. Through careful adjustment of the weighting of these assets, MahaDAO aims to ensure that the ARTH token maintains its value over time, shaking off the inflationary effects that are endemic to supposedly stable assets such as USD.
In a bid to become a cornerstone of the DeFi community, MahaDAO has set a 10-year emission schedule for MAHA. This will provide an ongoing trickle of rewards for yield farming or liquidity mining programs, while ensuring as wide and fair a distribution model as possible. Just 5% of the total supply of MAHA will be made available in the Polkastarter IDO.
Novel Stablecoins Proliferate
Although termed a valuecoin, ARTH can be bracketed with other stablecoins and pseudo-stablecoins that are programmed to maintain certain price parameters. Since October, a series of stablecoin projects have taken off with novel elastic supply mechanisms and rebalancing capabilities.
Empty Set Dollar (ESD) uses a seigniorage system and draws its inspiration from Ampleforth. It’s designed to stay as close to $1 as possible, with new tokens minted whenever the price has strayed a certain range above its peg during any eight-hour epoch. With a market cap of $184 million and 24-hour trading volume of $16 million, ESD has gained traction, even if it has struggled to adhere closely to its target price. DSD and Dollar Protocol are two other projects pursuing stablecoin stability through supply adjustment, with mixed results.
Once the MahaDAO platform launches in January, enabling users to create collateralized debt positions (CDPs) and mint ARTH, the valuecoin will have a chance to show what it’s capable of. If ARTH can evolve into a low volatility asset with a wide range of DeFi use cases, it could turn MahaDAO into the MakerDAO of Polkadot.