The Polkadot community is actively discussing a proposal to create a strategic Bitcoin reserve to enhance the network's treasury. The aim is to use 501,000 DOT over a year to purchase tokenized Bitcoin (tBTC).
Bitcoin Reserving Strategy via tBTC
The proposal includes utilizing Hydration’s Rolling Dollar-Cost Averaging (DCA) mechanism, allowing for even distribution of purchases to mitigate market volatility.
tBTC Liquidity through Hydration and Threshold
Once acquired, tBTC would be supplied to Hydration’s Omnipool, enhancing cross-chain liquidity and supporting ecosystem activity. Conversion from DOT to tBTC relies on Threshold Network’s non-custodial Bitcoin bridge, emphasizing decentralized custody and security in the reserve strategy.
Status of Initiative Discussion
Currently, the initiative remains in forum debate on the Polkadot network; it hasn’t progressed into a formal proposal or on-chain referendum. Community members are discussing mechanics, risks, and treasury implications before any official launch.
Creating a Bitcoin reserve via tBTC could protect treasury value and drive cross-chain growth by boosting liquidity. However, considerations around DOT price fluctuations and related risks need to be addressed.
