Polkadot Members Rally Around Strategic Bitcoin Reserve Proposal

Key Takeaways

• The Polkadot community is considering creating a Bitcoin reserve using a dollar-cost averaging (DCA) strategy.
• The plan would convert 500,000 DOT into tBTC, a Bitcoin-backed ERC-20 token.
• Bitcoin reserves are no longer just for governments and corporations—decentralized protocols are now joining in.

As governments and major corporations rush to add Bitcoin (BTC) to their balance sheets, the Polkadot community is exploring its own strategic reserve, bringing decentralized protocols into the mix.

A new proposal making the rounds in Polkadot’s governance forums suggests converting 500,000 DOT into tBTC, a Bitcoin-pegged token on Ethereum, over the course of a year.

The method? Dollar-cost averaging (DCA), but automated via Hydration’s “rolling DCA” mechanism.

From DOT to tBTC—One Block at a Time

The plan would deploy Hydration’s system to convert DOT into tBTC through recurring purchases.

Unlike traditional DCA setups, Hydration’s rolling feature automates the process—users simply top up a proxy account, and the system renews the DCA schedule on its own.

Under the proposal, a small amount—0.005 tBTC—would be added to the Hydration Omnipool, using Threshold Network’s non-custodial Bitcoin bridge.

At the proposed rate, 1 DOT would equal roughly 0.000041 tBTC.

Beyond adding BTC exposure to the Treasury, the move would also deepen on-chain liquidity and bolster incentives for Polkadot’s DeFi ecosystem.

The proposal remains under community discussion and has not yet reached the voting phase.

Bitcoin: From Volatile Asset to Digital Reserve

A decade ago, Bitcoin was a speculative asset with little institutional interest.

Fast-forward to 2025, and it’s being embraced as a reserve asset by both nation-states and Fortune 500 companies.

Strategy, SpaceX, and even central banks are adding Bitcoin to their treasuries. Now, decentralized protocols are looking to do the same.

For Polkadot, the timing could be strategic. DOT has lost around 60% of its value against BTC since January.

If the Treasury had allocated to Bitcoin six months ago using a DCA strategy, it could have yielded roughly $1.5 million in gains, despite the drop in DOT’s price.

Bitcoin’s volatility remains a sticking point for skeptics.

However, its long-term track record tells a different story, delivering 5–10x returns in each of the past few cycles.

For Polkadot, adopting BTC as a reserve—slowly and strategically—might be a bet on that long game.