DOT-Only Collateral Raises Risk

[cryptoenthusiast]

Skeptics also warn that backing pUSD solely with DOT could cause liquidation cascades and extra selling pressure — similar to DAI’s early ETH-only model before MakerDAO diversified collateral. Others note Polkadot already has alternatives like HOLLAR, optimized for appchains. Supporters say pUSD could still be transformative, but Polkadot must address these risks to avoid repeating aUSD’s mistakes.

[Nahid Hossen]

Relying only on DOT for pUSD collateral risks the same liquidation spirals DAI once faced.

[Abdul Khan]

Unless Polkadot diversifies, pUSD could repeat aUSD’s mistakes despite its big potential.