Polkadot’s treasury wants to dump 500,000 DOT tokens—worth about $2 million—to buy Bitcoin instead. That’s pretty telling when a blockchain project loses faith in its own token. DOT has crashed 60% since January, so converting to tBTC through Threshold Network’s bridge makes sense as damage control. The proposal uses Hydration’s automated DCA system and awaits community vote. Bitcoin’s sitting at 63.89% market dominance while DOT bleeds out. The full implications reveal deeper systemic issues.
While DOT holders watch their tokens bleed out with a brutal 60% drop since January, Polkadot’s brass is cooking up a plan that sounds almost desperate—or brilliant, depending on who you ask.
The proposal? Convert 500,000 DOT tokens—worth roughly $2 million—into tBTC, creating Polkadot’s first Bitcoin reserve. Yeah, you read that right. The ecosystem that’s supposed to be all about interoperability and parachains is now betting on Bitcoin to save the day.
Here’s how this financial gymnastics routine works. Polkadot wants to use Hydration’s “rolling DCA” mechanism to automate the conversion process. Think of it as setting up a recurring buy order, except instead of your weekly coffee subscription, it’s converting millions of dollars worth of tokens.
Users top up a proxy account, the system does its thing, and boom—DOT becomes tBTC through Threshold Network‘s non-custodial bridge.
The math is pretty sobering. At current rates, one DOT gets you about 0.000041 tBTC. That’s not exactly inspiring confidence in DOT’s value proposition.
But Polkadot’s team isn’t just throwing darts at a board here. They’re positioning this as risk management and diversification—fancy words for “we need something more stable than our own token.” Fixed supply cap of Bitcoin makes it an attractive hedge against economic uncertainty.
The reserve aims to boost on-chain liquidity and provide better incentives for the DeFi ecosystem. Translation: maybe people will actually want to use Polkadot again.
The community reaction? Mixed, as you’d expect. Some see it as a smart hedge against further DOT carnage. Others probably wonder why they’re holding DOT if even Polkadot doesn’t want to hold DOT.
This move reflects a broader trend of protocols building Bitcoin reserves, though most aren’t doing it while their native tokens are in free fall. The plan also calls for depositing 0.005 tBTC into Hydration’s Omnipool to enhance decentralized trading liquidity. The proposal is still in discussion phase, waiting for a formal vote. The broader crypto market shows just how dominant Bitcoin has become, with current Bitcoin dominance sitting at 63.89%.
Meanwhile, the SEC is dragging its feet on a spot Polkadot ETF decision, and the team is working on other projects like a DOT debit card.
Because nothing says “we believe in our ecosystem” quite like diversifying into Bitcoin and building traditional payment rails.
The irony is thick, but the strategy might actually work.
