Polkadot Eyes Bitcoin Reserve with 500K DOT Plan – Coincu

Key Points: 

• Polkadot community debates 500K DOT-to-Bitcoin reserve proposal amid volatile market conditions.
• Proposal uses Hydration’s DCA to convert DOT into tBTC, aiming for gradual and transparent execution.
• tBTC integration supports Polkadot’s decentralization goals while diversifying its treasury with Bitcoin exposure.

A recent governance proposal in the Polkadot ecosystem suggests converting 500,000 DOT tokens into Threshold Bitcoin (tBTC) over a one-year period. The plan involves using a dollar-cost averaging (DCA) strategy to make the transition gradual rather than immediate.

The purpose of the proposal is to create a strategic Bitcoin reserve that could help provide long-term financial stability for the network. This initiative is still in the discussion phase and has not yet been moved on-chain for voting.

Community Reaction to the Proposal

Polkadot community members have expressed differing views. Some support the move, seeing Bitcoin as a potential hedge during uncertain market conditions. Others question the decision to act while DOT trades near its lows and Bitcoin remains above $100,000.

Concerns include the risk of putting additional selling pressure on DOT and doubts over whether this reserve would bring value in the short or long term. One member suggested widening the discussion to include more feedback before any vote takes place.

Additionally, the proposed reserve would use Hydration’s Rolling DCA mechanism to acquire tBTC over time. tBTC is a non-custodial token representing Bitcoin, backed by the Threshold Network. The integration would allow Polkadot to maintain decentralization, liquidity, and transparency.

According to the proposer, the goal is not market speculation but risk management. Waiting for perfect market conditions, they argued, could delay diversification efforts indefinitely.

Future Direction and Broader Ecosystem Developments

The community is expected to vote on the proposal after further discussions. Any decision to proceed will require approval through Polkadot’s governance process.

Recently, Polkadot approved the launch of a branded non-custodial payment card, which works with services that accept Visa. This development reflects the broader effort to enhance utility within the Polkadot ecosystem.

Meanwhile, the U.S. SEC delayed its decision on the 21Shares Polkadot ETF application, extending the review process. As reported by CoinCu, the ETF, proposed for listing on Nasdaq, has attracted attention from institutional investors. The decision is expected by June 2025.

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