Will Polkadot Accept This Major Request From A RWA Platform? DOT Down 65%
11 September 2024 - 5:30AM
NEWSBTC
Centrifuge, a real-world asset (RWA) solution and a Parachain, has
a plan for Polkadot, a smart contracts platform. In a proposal, the
RWA platform suggests that the newly created Polkadot Community
Foundation allocates $3 million USDC to their T-Bill pool. This
pool is held within the Anemoy Liquid Treasury Fund and aims to
serve multiple objectives. Centrifuge Wants Polkadot To Invest $3
Million In T-Bills In their proposal, allocating the $3 million to
T-Bill as an investment will benefit the broader ecosystem. Of
note, it will help boost the long-term sustainability of the
Polkadot Treasury. This is because the T-Bill pool will generate
stable yields from real-world assets, thereby further increasing
the financial health of the Treasury. Related Reading: Cardano
Foundation Reports Massive Growth In These Key Metrics – ADA Price
Soars 3% Though the funds will be from the foundation, Centrifuge
argues that injecting the $3 million USDC into the T-Bill pool will
help increase the network’s total value locked (TVL). Subsequently,
this will also expand the Treasury’s assets. The foundation might
consider investing in RWAs, as proposed by Centrifuge, as it could
foster the growth of this technology within Polkadot, pushing
adoption and growth as a result. Laying out their proposal,
Centrifuge said if the foundation decides to invest, it would align
with their previous investment in the Anemoy Liquid Treasury Fund.
In turn, this may offer a unique opportunity for Polkadot to
diversify and expand its investment basket. It is especially now
that tokenization and RWA is picking up momentum. RWA Picking Up
Steam, Will DOT Reverse Losses? BlackRock, one of the top asset
managers in the world, is one of the leaders in tokenizing treasury
bills. On Ethereum, the manager has launched BUIDL, a platform
where institutions can invest in tokenized Treasury bills. As of
September 10, BUIDL is the largest tokenized Treasuries provider,
managing over $514 million, according to RWA.xyz. The
proposal is so far garnering community support. Roughly a week
before the decision, over 53% agreed with this proposal. However,
some community members are expressing concerns. Related Reading:
Ethereum Sees Massive Outflows from Derivatives: What Does This
Mean For ETH? Most of them point to the potential risks and the
negative implications of this on the network’s Treasury. One
concern is that if this is approved, it could increase DOT spending
requests, eventually depleting its reserves. While the prospect of
RWA taking off in Polkadot is bullish, DOT is still under pressure.
From the daily chart, DOT is down roughly 65% from March highs. It
is also in a descending channel and retesting multi-month
support. The primary support lies at around
$3.5. On the upper end, resistance is at $5. A break above this
line will lift sentiment, propelling the coin towards $6.5 in a buy
trend continuation formation. Feature image from Unsplash, chart
from TradingView
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