Polkadot Launches pUSD: A DOT-Backed Stablecoin Shaking Up On-Chain Finance (2025 Update)

Why Polkadot’s pUSD Is More Than Just Another Stablecoin

Polkadot’s Asset Hub is rolling out pUSD as a 100% DOT-collateralized stablecoin, addressing two pain points: enabling borrowing without selling DOT and reducing the ecosystem’s dependency on external stablecoins like USDT. As of September 2025, Referendum 1761 shows 85.6% approval, signaling strong community backing. This isn’t just technical—it’s a liquidity reboot for Polkadot’s DeFi, which still trails giants like Ethereum. The roadmap includes treasury integration (allowing pUSD payments) and governance tweaks via OpenGov. Think of it as Polkadot’s monetary sovereignty play.

How pUSD Works: DOT as Collateral, Simplified

The mechanics are straightforward: users lock DOT, mint pUSD, and later repay to reclaim collateral. Unlike multi-asset models (looking at you, MakerDAO), pUSD keeps it simple with DOT-only backing. Bill Laboon of Web3 Foundation tweeted the proposal’s voting LINK on September 26, 2025, emphasizing risk transparency. This aligns with Polkadot’s OpenGov framework, where token holders steer protocol upgrades. One snag? Volatility. If DOT tanks, liquidations could spike—hence the 85.6% approval threshold to ensure robust safeguards.

Breaking the USDT Habit: pUSD’s Treasury Play

Beyond symbolism, pUSD is a practical tool. The proposal lets Polkadot’s treasury accept pUSD instead of DOT for ecosystem funding, dodging USDC/USDT reserve management. This reduces DOT’s sell pressure and stabilizes public spending. Argentina’s 2025 peso crash (where stablecoin usage surged 300% monthly, per CoinMarketCap) shows why ecosystems crave this autonomy. Colorful Notion’s viral tweet—“MAN THE FUCK UP! Are we ready for pUSD?”—captures the hype.

Inflation Fix? pUSD’s Long-Game Potential

Here’s the sleeper feature: pUSD could curb DOT’s inflation. By paying staking rewards or grants in pUSD, fewer new DOT need minting. TradingView charts show DOT’s annual inflation at 7%—high versus competitors. But this requires precise collateral ratios (think 150% minimum) to avoid 2022 Terra-style blowups. As one BTCC analyst noted, “It’s about balance: enough pUSD to be useful, not so much that liquidations spiral.”

Final Countdown: Will pUSD Clear 85.6%?

At 75.4% approval as of September 29, 2025, pUSD needs a final push. Community channels are buzzing with explainers, but critics worry about DOT’s correlation risk. Success means Polkadot gains a DeFi anchor; failure keeps it reliant on external stables. Either way, the vote—open until October 3—is a referendum on Polkadot’s financial independence.

FAQs: Polkadot’s pUSD Stablecoin

What is pUSD?

pUSD is Polkadot’s native stablecoin, 100% backed by DOT and governed by OpenGov.

How does pUSD reduce USDT dependency?

By enabling DOT-collateralized borrowing and treasury payments, cutting need for external stables.

What’s the current approval rate for pUSD?

85.6% as of September 29, 2025, per Referendum 1761.