Polkadot Plans to Launch Native Stablecoin dotUSD

BlockBeats News, September 9 - According to official sources, the Polkadot community has initiated OpenGov Proposal No. 1944, aiming to create a native decentralized stablecoin, dotUSD, and establish it as the primary stable value asset within the Polkadot ecosystem. The proposal is currently undergoing governance voting.

Per the proposal, dotUSD will adopt an over-collateralization mechanism, allowing users to mint dotUSD by locking DOT in the future. The system will also incorporate a stability pool, liquidation mechanisms, and a redemption mechanism to maintain dotUSD's peg to the US dollar.

The proposal plans to utilize funds from the Polkadot Treasury to provide initial liquidity for the DOT/dotUSD liquidity pool, with $2.5 million in USDT allocated for minting dotUSD and an additional $2.5 million worth of DOT designated for the liquidity pool, totaling $5 million in initial capital. dotUSD is slated for a phased rollout: Phase 1 will use USDT as reserve support for dotUSD minting; Phase 2 will introduce a full DOT-collateralized vault, oracle, stability pool, liquidation, and redemption mechanisms.