Polkadot community members are considering a new proposal to introduce Bitcoin exposure into the network’s treasury. According to Wu Blockchain, the plan outlines using 501,000 DOT to acquire tBTC over the span of one year gradually.
The purchase would occur using the Rolling Dollar-Cost Averaging (DCA) system of Hydration. After gathering, the tBTC would be deposited into the Hydration Omnipool as liquidity, with Threshold Networks non-custodial Bitcoin bridge doing the conversion.
Plan Targets Diversified Treasury Backed by tBTC
The key aim of the plan is to improve Polkadot’s financial standing by presenting a reserve currency based on BTC. The suggested integration of tBTC gives a fully backed, decentralized variant of Bitcoin on Ethereum, which introduces an additional degree of security and decentralization. This would limit the reliance on DOT solely in the treasury.
The Rolling DCA strategy reduces the volatility risk associated with one-time purchases by spreading the purchases throughout the year. The mechanism enables Polkadot to accumulate its tBTC possessions over time and in a safer way, which is in line with the long-term objectives of managing the treasury.
Threshold Network would be the key player in the process of the switch between Bitcoin and tBTC. This prevents the use of centralized custodians and allows the treasury to have complete control of its newly acquired assets.
Hydration Omnipool to Gain Liquidity from New tBTC Strategy
Provided this is adopted, the tBTC obtained under the strategy would be added directly into the Omnipool of Hydration. The action should increase the liquidity of the pool, making trading more efficient and wrapping Bitcoin assets more accessible in the ecosystem.
Furthermore, tBTC might attract more users and developers interested in further integration of Bitcoin in decentralized systems. It also provides the treasury of Polkadot with a hedge against the volatility of the price of DOT, enhancing its long-term financial stability.
At the time of writing, this proposal remains in the forums and has not yet been live on-chain. A broader community consensus will be necessary to give final approval.
Conclusion
The proposed Bitcoin Strategic Reserve marks a significant shift in how Polkadot manages its treasury. If the community supports the move, it would represent a step toward a more diversified and decentralized financial future for the network.
