The Polkadot community has introduced OpenGov Proposal 1944, a plan to create dotUSD as a native decentralized stablecoin and position it as the main stable-value asset within the Polkadot ecosystem. The proposal is currently under governance vote. Under the draft, dotUSD would use an overcollateralized model, allowing users to mint the token by locking DOT. The system would also include a stability pool, liquidation process, and redemption mechanism to help maintain its peg to the U.S. dollar. To bootstrap liquidity, the proposal calls for using Polkadot treasury funds to seed a DOT/dotUSD liquidity pool with a total of $5 million in initial capital. Of that amount, $2.5 million in USDT would be used to mint dotUSD, while another $2.5 million worth of DOT would be added to the pool. The rollout is planned in stages, with the first phase using USDT reserves to support minting, followed by a second phase that adds a full DOT-backed vault system, oracle support, a stability pool, liquidation, and redemption functions.
The Polkadot community has submitted OpenGov Proposal 1944 to create dotUSD, a native decentralized stablecoin that would be positioned as the primary stable-value asset in the Polkadot ecosystem. The proposal is currently in the governance voting stage.
According to the proposal, dotUSD would use an overcollateralized design, allowing users to mint dotUSD by locking DOT. The system would also include a stability pool, liquidation mechanisms, and redemption functions to help keep the token pegged to the U.S. dollar.
Initial liquidity plan
The proposal says Polkadot treasury funds would be used to provide initial liquidity for a DOT/dotUSD pool. That setup includes $2.5 million in USDT to mint dotUSD, along with another $2.5 million worth of DOT to be added to the liquidity pool, bringing the initial allocation to $5 million.
Phased rollout
dotUSD is planned to launch in stages. In the first phase, USDT would serve as reserve backing for minting. In the second phase, the project would add a full DOT-collateralized vault, oracle infrastructure, a stability pool, liquidation mechanisms, and redemption functions.
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