Polkadot contributors were discussing pUSD, a proposed dollar-pegged token backed by DOT, in September 2025. Bryan Chen’s RFC-155 set out a design for Asset Hub using Acala’s Honzon protocol.
The proposal matters because users could borrow a stable-value token against DOT rather than selling their holdings. It did not establish that the system had launched or that its peg would be guaranteed.
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Collateral and liquidation
The design called for users to deposit DOT into collateralized debt positions and mint pUSD within borrowing limits. Positions falling below the required collateral ratio would face liquidation. An optional savings module would distribute a share of stability fees to participating holders.
What remained unresolved
The RFC identified risks around price feeds, available liquidation liquidity and governance decisions. It also left questions about the proposed Financial Fellowship, emergency powers and savings parameters open for discussion.
Collateral backing does not eliminate price risk: a sharp fall in DOT could make timely liquidation more difficult. Readers can explore the mechanics in our Learn library.
Editor’s note: The description now specifies an overcollateralized proposal rather than implying a launched, unbacked algorithmic stablecoin. Unverified voting snapshots and an incorrectly attributed quotation have been removed. The original publication date is retained.