The Polkadot Treasury has allocated 2 million DOT, valued at $14.4 million, to boost the liquidity of the DeFi project Hydration, as announced on June 10 in a statement shared with CryptoSlate.

These funds are intended to enhance the liquidity and efficiency of Hydration’s single-sided liquidity provisioning platform, Omnipool.

This funding aligns with Polkadot’s broader efforts to improve and expand network adoption globally. Recently, the blockchain's Web 3 Foundation has also funded projects like PolkaPort East and Accelerate Polkadot.

**Two-Phase Execution**

The allocation will be executed in two phases. In the first phase, 1 million DOT will be disbursed to attract new liquidity to the Polkadot ecosystem. This includes providing liquidity providers (LPs) with rewards that offer an annual percentage yield (APY) exceeding 200%.

Hydration’s Omnipool’s single-sided LP design will facilitate this reward system, allowing users to earn rewards by depositing single assets or joining an incentive farm with stablecoins, DOT, and Bitcoin.

The second phase will allocate the remaining 1 million DOT to support the Hydration Omnipool, enhancing the native liquidity layer for the Polkadot 2.0 ecosystem. This is in addition to the 690,000 DOT already deposited into the Hydration Omnipool.

The funding aims to advance liquidity management on the Polkadot network, setting a new standard in blockchain technology. The Polkadot Protocol and OpenGov will manage these funds.

Jakub Gregus, co-founder of Hydration, described this allocation as a crucial moment for the project, emphasizing that this liquidity injection is vital for the health of the Polkadot ecosystem. He stated:

“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.”

This funding comes shortly after the project was renamed from HydraDX. According to its website, the platform has a total value of assets locked at $28 million and a trading volume of $50 million over the past 30 days.