Forked tokens: why DAI on PulseChain is not a dollar

Where they came from

PulseChain is a hard fork of Ethereum. The fork activated at block 17,233,000, and from then on every token contract Ethereum had, with every balance in it as of the block before, existed on both chains.

An address that held 1,000 DAI on Ethereum at block 17,232,999 held 1,000 of the forked DAI on PulseChain as well, at the same contract address.

One chain

Up to block 17,233,000

• 2 ETH
• 1,000 DAI

Block 17,233,000

Ethereum

Carries on unchanged

• 2 ETH
• 1,000 DAI

The DAI is backed, as before

PulseChain

A chain of its own from here

• 2 PLS
• 1,000 pDAI

Same contract, nothing behind it

The same address on both. Spend on one chain and the other does not change.

Why nothing backs them

A stablecoin is a promise. USDC is worth a dollar because its issuer will pay a dollar for it. That promise covers USDC on the networks the issuer supports, and the forked contract on PulseChain is not one of them.

The same holds for WBTC, where a custodian holds the bitcoin for the tokens on Ethereum only. And for DAI, where the collateral behind the forked DAI is itself forked tokens.

With no promise behind it, a forked token is worth what its pool will pay for it, and nothing else.

Three tokens, one name

• DAI on EthereumThe originalThe original, on its own chain.
• pDAIUnbackedThe token the fork carried over. On PulseChain, at the original’s address, unbacked.
• DAI from EthereumA claim on the originalReal DAI brought over the bridge. On PulseChain, at a different address, and a claim on DAI locked on Ethereum. Often written eDAI.

HEX is a different case

HEX has no issuer and promises no redemption. Its contract does everything it does on both chains, stakes included. So the fork left two working HEX, each with its own price.

This site shows them as two assets: HEX is the one on PulseChain, and eHEX the one on Ethereum.

How to tell which one you hold

• The address. A token on PulseChain at the same contract address as on Ethereum is the forked one.

• The name. A token brought over the official bridge carries “from Ethereum” in its name.

• The price. A dollar coin trading far from a dollar is a forked one.

• The mark. On this site a forked token is marked as forked, on its page and in search.

What costs people money

• pDAI is a dollar, because DAI is

  pDAI and pUSDC carry the names of dollar coins and none of the backing. Each is worth what its pool pays.

• My wallet is worth what it would be on Ethereum

  A balance of forked tokens is worth what PulseChain’s pools pay for it, which is far less.

• An exchange that lists DAI will take pDAI

  An exchange credits the token it lists. The forked one is a different asset on a different chain.