Polkadot’s community foundation has filed a governance mandate that would crown dotUSD the DAO’s favored stablecoin. This is coming a few days after the token went live.
The token is backed entirely by Tether’s USDT, which is not the same as the DOT collateral that its own pitch demanded.
The proposal, listed as Referendum 1954 on Polkadot’s “Wish for Change” track, comes from the Polkadot Community Foundation (PCF) and the same on-chain account, 16kZ…uDMf, that submitted Referendum 1944.
dotUSD made its way to the mainnet on October 8 after it received over 98% of the votes in support. According to Polkadot’s Subsquare governance records, it launched with 4.3 million DOT.
Priority for a coin still minted one-for-one against USDT
The latest mandate calls for “dotStables,” permissionless stable-value derivatives meant to be backed by DOT, with dotUSD as the flagship instrument.
The mandate says that the DAI may subsidize and support one such instance. It also says that it will treat it “with primacy.” This does not mean that other issuers will lose their permissions; however, it means they will be secondary.
Where a single reference currency helps liquidity, the proposal wants dotUSD used first.
In its first phase, Referendum 1944 allows users to mint dotUSD at one dollar of USDT per dollar of dotUSD, up to a cap. However, the reserve is made up of Tether’s token.
So, this means that there is no DOT collateral, oracle, or liquidation system in the first version. This is the current version that is live.
However, it is quite ironic that Tether’s token is the choice for the reserve because that is exactly what the proposal preaches against.
It called out the cons of relying on tokens that are backed by centralized stablecoin issuers such as Tether and Circle, who are the issuers of USDT and USDC, respectively.
It pointed out that centrally controlled tokens can be frozen by their issuer, and this can throw the whole operations of the platform relying on them into jeopardy.
The DOT-collateralized build, modeled on Liquity v2’s BOLD, has no launch date. DOT itself traded around $1.17 after the launch, up about 6.1% on the day. It currently trades around $1.23, down by 3.5% in the past 24 hours.
On-chain incentives in place of influencer deals
The latest mandate also wants a different direction for how the marketing operations should be done.
It says that any growth spending should go through on-chain logic instead of outside firms. It also says that it should reach individual, verified humans under a per-person algorithmic cap.
It also reads as if it were a rebuke of Polkadot’s recent spending. In the first half of 2024, the network put about $37 million, 42% of its expenses, into marketing, out of nearly $87 million spent overall.
It spent around $180,000 to brand a fleet of European private jets. It also spent $400,000 for an animated logo on CoinMarketCap. Close to $5 million went to influencers.
Questions over the foundation making the call
The PCF, which is behind the launch of dotUSD and the latest mandate, has also come under pressure to account for how it spends its community funds.
A June 2026 forum request asked the PCF to publish a roadmap and a full accounting of treasury funds for the Polkadot App. That product was mentioned in 2024, but it remained unavailable to general users for more than a year.
The PCF states it acts only in an administrative capacity and does not issue, operate, or hold custody of dotUSD, DOT, or USDT.
What does primacy mean for Hollar and pUSD?
Giving one DAO-blessed stablecoin priority has stakes for the projects already competing on Polkadot. Hydration’s Hollar, built on Aave’s design, is treated as a third-party effort, per Polkadot governance discussions.
There was a vote that rejected an earlier bid for a DOT-only native coin, pUSD, based on the Honzon protocol. Only 18.6% voted in favor then.
The mandate gives DAO-backed instances the platform’s default position. This is a lever that could sideline competitors while the favored coin still runs on Tether.
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