Polkadot Announces $14.4M Allocation to Boost DeFi with Hydration

Hydration, the top DeFi project on Polkadot, is excited to share that it has received a generous grant of 2 million DOT tokens (worth $14.4 million) from the Polkadot treasury. The funds will enhance the liquidity and trading efficiency of Hydration’s single-sided liquidity provisioning platform, Omnipool.

There are two main aspects to consider regarding the distribution of DOT tokens. A total of one million DOT will be allocated over one year to incentivize new liquidity in the Polkadot ecosystem. Liquidity Providers (LPs) will be rewarded with attractive initial returns, surpassing the 200% APY threshold. The Hydration Omnopool’s unique single-sided LP design allows users to start earning rewards when they provide a single asset and join an incentives farm. The platform incentivizes various assets, including native stablecoins, DOT, BTC, and several ecosystem coins.

The remaining one million DOT will be injected directly into the Hydration Omnipool. This injection aims to support the creation of a strong and easily accessible layer of native liquidity, which will benefit the broader Polkadot 2.0 ecosystem in the long run, as outlined in Treasury Proposal #730. The capital contributes to an already impressive 690k+ dot (AND 560k+ vDOT) that has been LPed into the Hydration Omnipool.

Hydration co-founder Jakub Gregus said, “This generous allocation from the Polkadot treasury marks a pivotal moment for Hydration. With this welcome injection of liquidity, we are able to significantly deepen our liquidity, which is vital not just for our growth but also for the continued health of the entire Polkadot ecosystem.”

“The Hydration Omnipool is designed to provide unparalleled efficiency and accessibility in trading crypto-assets, and this support from the Polkadot treasury is a testament to the potential impact of our forward-looking approach.”

The Polkadot Protocol and OpenGov will decentralize and non-custodially maintain the funding for the Hydration Omnipool.

This strategic initiative will revolutionize liquidity provision and management within the Polkadot ecosystem, establishing a groundbreaking benchmark for liquidity solutions in the shared blockchain network.