TL;DR
- Hydration, the largest DeFi protocol on Polkadot, launched HOLLAR, a decentralized, over-collateralized stablecoin backed by DOT, ETH, and BTC.
- The token will have an initial supply of 2M units, with a 5% annual minting rate, and direct integration with trading, lending, and staking on the network.
- The project aims to set itself apart from USDT and USDC with a model free from banking dependence, a stability module, and reserves greater than its circulating supply.
Hydration, the largest DeFi protocol in the Polkadot ecosystem, launched today its native stablecoin HOLLAR, designed as a decentralized, over-collateralized asset.
The token is backed by a basket of cryptocurrencies that includes DOT, ETH, and BTC, with an initial supply capped at two million units and a 5% annual minting rate. The new stablecoin integrates directly with Hydration’s trading, lending, and staking services, strengthening its role within Polkadot’s financial ecosystem.
What Sets Hydration’s Proposal Apart?
HOLLAR’s design seeks to address concerns about centralization risks in stablecoins like USDT or USDC, which rely heavily on the traditional banking system. Instead, Hydration is betting on a fully decentralized model, with reserves exceeding circulating supply and a Stability Module that provides real-time price support and partial liquidations to protect user positions.
Jakub Gregus, founder of Hydration, stated that the project aims to move beyond what he considers incomplete solutions in today’s market and to redefine what a stablecoin can deliver when the entire execution environment is under direct control. In the same vein, Polkadot’s creator Gavin Wood highlighted that he prefers using HOLLAR over USDC or USDT due to its decentralized nature and its use of DOT as collateral.
The Meteoric Rise of Stablecoins
The launch comes in the context of rapid growth in the stablecoin sector, whose total market capitalization has reached $293 billion, up 69% from a year ago, according to DefiLlama. Tether continues to lead with $172 billion in USDT, while Circle maintains nearly $74 billion in USDC. Recently, Tether also announced USAT, a new project focused on the U.S. market.
With this launch, Hydration strengthens its position within Polkadot, where it holds more than $330 million in total value locked, compared to Moonbeam, which barely surpasses $9 million. Polkadot itself has a market capitalization close to $6 billion and ranks as the 36th largest blockchain globally
