Polkadot’s community has opened a governance vote on a proposed native stablecoin called dotUSD, which could become the network’s main stable-value asset. The proposal aims to make dotUSD a dollar-pegged stablecoin that is eventually backed mainly by Polkadot’s native DOT token. If approved, the stablecoin would operate through on-chain rules without a central issuer. The plan is being considered under Polkadot OpenGov Referendum 1944 and remains in the decision stage.
The proposed stablecoin would be introduced in two phases. The first phase has already been built on-chain and would allow users to mint dotUSD against USDT on a one-for-one basis, subject to a supply limit. Because USDT would provide the initial backing, this stage would not require an oracle, collateral vaults or liquidation mechanisms.
Source: polkadot.io
The proposal also seeks to use Polkadot Treasury assets to create initial liquidity for dotUSD. One version of the proposal allocated $2.5 million in USDT and another $2.5 million worth of DOT to establish a $5 million DOT/dotUSD liquidity pool on Polkadot Asset Hub. A more recent version displayed on Subsquare lists a smaller allocation of $1.5 million each in USDT and DOT.
The second phase would move the system towards its intended DOT-backed design. It would introduce collateral vaults, an oracle, a stability pool, liquidation mechanisms and a redemption system. Users would be able to deposit DOT and borrow dotUSD against their collateral, while maintaining a required collateralisation ratio.
The proposal gives an example in which 300 DOT valued at $5 each would provide $1,500 of collateral. A user could borrow up to $1,000 in dotUSD, giving the position a 150% collateralisation ratio. If the value of DOT falls far enough, the position could become eligible for liquidation.
Polkadot may soon have its own native stablecoin
The @Polkadot Community Foundation has introduced a formal proposal for $dotUSD, a native decentralized stablecoin utilizing a market-discovered interest rate model.
The protocol architecture is derived from Liquity Protocol v2,… pic.twitter.com/FCy1jXwZbX
— BSCN (@BSCNews) September 8, 2026
The system would use market mechanisms to help keep dotUSD close to its $1 target. If dotUSD trades above $1, users could mint more and sell it. If it falls below $1, traders could buy it at a discount and redeem it through the protocol.
An archived snapshot of the governance vote showed strong support at that stage, with 97.5% of voting DOT supporting the proposal. However, the figures were frozen while the referendum was still underway and may not reflect the final result.
The proposal reflects Polkadot’s broader effort to create more native financial infrastructure. It argues that using a stablecoin controlled through the network could reduce dependence on externally issued dollar tokens and allow some treasury and network payments to be denominated in dollars while remaining within the Polkadot ecosystem.
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