Polkadot Goes Live With dotUSD Stablecoin Under DAO Governance

Polkadot has launched dotUSD on mainnet, giving the network a native stablecoin governed through its on-chain OpenGov system. The stablecoin has no private issuing company, while DOT holders control key decisions through the network’s decentralized governance process.

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Polkadot dotUSD Stablecoin Launches Through OpenGov

dotUSD was approved through Polkadot OpenGov Referendum 1944, which established the asset and its initial operating structure. The proposal also approved a DOT-dotUSD liquidity pool and treasury funding to support liquidity during the first rollout. The referendum passed with 98.4% support, while about 4.3 million DOT backed the proposal.

The stablecoin runs on Polkadot Hub, and its design draws from the Liquity v2 BOLD architecture. However, the rollout starts with a simpler peg mechanism before adding the planned DOT-backed borrowing system. The first phase therefore does not require price oracles or liquidation logic.

The launch comes as stablecoins are moving into more payment and enterprise systems. Circle and Tereina are bringing USDC and EURC into SAP payment workflows for eligible businesses. That rollout uses company-issued stablecoins, while dotUSD places protocol-level governance with DOT holders.

Stellar is also expanding its role in stablecoin payments after BVNK added the network to its payments platform. The integration allows businesses to use Stellar for USDC payments and settlement. Unlike those issuer-backed models, dotUSD is governed through Polkadot’s OpenGov system rather than a private issuing company.

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dotUSD Starts With USDT Before Planned DOT-Backed Phase

During the first phase, users can mint dotUSD one-for-one against USDT through a Peg Stability Module. They can also redeem dotUSD for $1 worth of USDT, although an initial supply cap applies. The design also lets users hold dotUSD without needing DOT in the same account.

Although dotUSD has no corporate issuer, its first phase still depends on USDT as backing. Polkadot described this stage as a bridge while developers complete the fuller collateral system. The network framed the phased model as a way to begin circulation before the remaining components are ready.

A later phase is designed to let users lock DOT as collateral and mint dotUSD against those positions. That system will add price oracles, liquidations, a stability pool, and redemption mechanics based on Liquity’s model. Borrowers would also select interest rates, while lower-rate vaults would face earlier redemption.

DOT Price Falls Despite dotUSD Mainnet Launch

At press time, DOT was trading around $1.04, down 4.69% over 24 hours despite the dotUSD stablecoin launch. The decline continued even as the new stablecoin became available on Polkadot mainnet.

September had delivered a stronger performance, with DOT gaining roughly 45% during the month. However, Polkadot’s dotUSD launch also comes as stablecoin rules tighten in Europe. Circle recently urged the EU to revise MiCA rules, saying only three of the 30 largest stablecoins complied with the framework.