Introduction
In a recent initiative, members of the Polkadot community, including contributors known as jump_BAHA_jump and Alice_und_Bob, have introduced a proposal on the Polkadot forum. Their aim is to create a Bitcoin strategic reserve for the Polkadot treasury, aligning with the community’s aspirations outlined in referendum #1394, dubbed ‘Wish for Change‘. This strategic move seeks to bolster the treasury’s long-term stability and mitigate risks by diversifying asset holdings.
Proposal Details
The newly introduced proposal is currently in the discussion phase on the forum and has yet to be activated on the blockchain. It suggests utilizing 501,000 DOT, a token on the Polkadot network. The plan includes converting 500,000 DOT into tBTC, a tokenized form of Bitcoin, with the remaining 1,000 DOT allocated for transaction fees during this exchange.
Execution Strategy
The execution of this asset conversion will leverage the Dollar-Cost Averaging (DCA) strategy facilitated by the Hydration Protocol. This approach is designed to gradually transform 500,000 DOT into tBTC over a span of one year, with the intention of providing liquidity to the Hydration Omnipool.
Background on tBTC
For context, tBTC serves as a decentralized, non-custodial solution for bridging Bitcoin, provided by Threshold Network. This system utilizes a threshold ECDSA wallet to ensure secure transactions, making it a suitable component for the proposed treasury diversification.
