Empowering Decentralization: Polkadot DAO Allocates 3M DOT for DeFi Growth

Community-led DeFi initiative allocates 3M DOT from the Polkadot Treasury, boosting liquidity for DeFi projects Hydration and StellaSwap.

By Polkadot•June 10, 2024

With an overwhelming majority of voters in favor, the Polkadot community has chosen to allocate 3 million DOT to enhance the ecosystem’s decentralized finance (DeFi) landscape. Made through three separate proposals via Polkadot’s decentralized governance (OpenGov), this decision provides an accessible, deep layer of native liquidity to help the ecosystem flourish. It also demonstrates the power of community-driven initiatives to shape the future of decentralized finance. Hydration (formerly known as HydraDX) focuses on improving DeFi liquidity, while StellaSwap aims to optimize the efficiency of automated market makers (AMMs).

Hydration: Simplifying and enhancing DeFi

Hydration, the premier liquidity protocol on Polkadot, is on a mission to make DeFi efficient, simple, and unstoppable by integrating swaps, lending, and a stablecoin under one scalable appchain. Through OpenGov referenda #560 and #561, the community allocated 2 million DOT from the Polkadot Treasury to drive increased adoption and enable more efficient trading on Polkadot.

Here’s how Hydration plans to use the grants:

Liquidity mining incentives: 1 million DOT is dedicated to liquidity mining incentives for users providing liquidity in Omnipool, Hydration's flagship AMM. This decentralized and non-custodial incentivization aims to boost participation and liquidity in the ecosystem.
Non-custodial liquidity: Another 1 million DOT is planned to be used for liquidity in Omnipool. This DOT remains under the control of the Polkadot protocol and OpenGov, ensuring a decentralized and secure approach.

Hydration supports a variety of assets, including DOT, USDC, USDT, iBTC, and over eight other Polkadot ecosystem assets. Users can easily move liquidity from Ethereum onto Hydration with just one click using the cross-chain user interface.

StellaSwap: Redefining AMM efficiency

StellaSwap, a highly efficient, integrated decentralized exchange (DEX), features a standard, stable, and concentrated liquidity AMM. Operating similarly to a centralized exchange (CEX) order book, it enables lower slippage costs, better price discovery, and reduced total value locked (TVL) requirements for low-slippage trading. Through OpenGov referenda #580, the community allocated 1 million DOT to support increased adoption and stimulate network growth.

Here’s how the StellaSwap team plans to use the funds:

Liquidity incentive program: 1 million DOT will be used to grow and deepen the market depth of strategic assets for widespread utility across the Polkadot ecosystem.

Community-backed initiatives shape the future of the Polkadot ecosystem

The Polkadot DAO’s allocation of 3 million DOT from treasury to support Hydration’s and StellaSwap’s proposals for DeFi growth showcases the critical role of community-led decision-making in driving a flourishing ecosystem on Polkadot. Approved through a decentralized democratic process, these initiatives reflect the collective motivations and priorities of the Polkadot community. As Polkadot continues to evolve, the community’s advocacy and decision-making will become increasingly vital to ensuring the ecosystem remains innovative and aligned with the values of its members.

Join Polkadot in shaping the future of a free and open web. Participate in governance discussions, vote on proposals, set forth your own proposals, and stay engaged with the Polkadot community. Together, we can continue to drive the evolution of a truly decentralized and user-centric ecosystem.

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