Polkadot proposes a $5 million treasury plan for dotUSD, with DOT holders voting on its native stablecoin launch and future backing.
Polkadot is considering launching a native stablecoin called dotUSD through its OpenGov governance system. If approved, the proposal will consume approximately $5 million of the network’s treasury.
The proposal is known as Referendum 1944 and has been placed on the ballot. DOT holders will determine if Polkadot should have a stable value asset, called dotUSD. Community members across the Polkadot ecosystem initiated the idea. It was submitted via the Polkadot Community Foundation, which would only present it for a community vote.
How Will Polkadot Fund the dotUSD Launch?
The proposal needs approximately $5 million in initial treasury funding. The first dotUSD tokens would be minted using approximately $ 2.5 million worth of $2.5 million.
Initial liquidity would be provided by another $2.5 million in DOT. This liquidity could be used for a DOT and dotUSD trading pool on Polkadot Asset Hub.
A referendum proposing dotUSD, a protocol-native stablecoin for Polkadot, is now live on DOT DAO governance.
The proposal was drafted by community members across the Polkadot ecosystem and submitted to OpenGov via the Polkadot Community Foundation. PCF’s role is limited to… pic.twitter.com/AcBEQ1Cj56
— Polkadot (@Polkadot) September 10, 2026
They would be able to swap DOT and dotUSD directly in the planned pool. This meant that users were no longer required to rely on external liquidity providers for the new stablecoin.
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DotUSD would be based on a stablecoin-backed model, but with a limited supply. Users would be able to mint and redeem dotUSD using an asset-backed stablecoin system.
The proposal would also create a Peg Stability Module. This mechanism would establish key rules for the stablecoin, such as the initial minting restrictions.
Importantly, DOT would not be the primary asset that would be used to back the issuance. Rather, the first phase would be based on existing stablecoin reserves.
The proposal would also provide adequate assets for users of dotUSD. This would allow users to store dotUSD on the blockchain without having to store DOT tokens for simple transactions separately.
Could DOT Back dotUSD in the Future?
Polkadot has a second phase in its plan with a different design. This stage could introduce DOT-collateralized vaults and make DOT more important to the stablecoin system.
In that scenario, users would provide DOT as collateral and generate dotUSD. This stage would need further development and approval by the government in the future.
The second phase may also include price oracles, liquidation systems, and stabilization pools. Such mechanisms would help to keep the stablecoin stable during significant market fluctuations.
But keeping the dollar’s value stable may prove to be the greatest hurdle. The price of DOT can see significant fluctuations, potentially posing risks to a DOT-backed stablecoin.
Meanwhile, dotUSD could reduce Polkadot’s dependence on stablecoins issued by outside companies. The new asset may be used for payments, trading, decentralized finance, and more.
The proposal is thus a step toward the development of financial infrastructure in Polkadot. A native dollar-based asset might also be a uniform device for on-chain transactions.
The plan, however, is not yet approved by the community. DOT holders will ultimately decide whether Polkadot moves forward with the dotUSD plan.
The $5 million in treasury funding, if approved, would assist in getting the first phase off the ground. Later, governance may decide if DOT will be used as collateral for the stablecoin.
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