Polkadot Treasury has allocated 2 million DOT, valued at $14.4 million, to enhance liquidity for the DeFi project Hydration, as per a statement shared with CryptoSlate on June 10.

The funding aims to boost liquidity and operational efficiency of Hydration's single-sided liquidity provisioning platform, Omnipool. This initiative aligns with Polkadot's ongoing efforts to expand global adoption. In recent weeks, the Web 3 Foundation, overseeing Polkadot, has supported various projects including PolkaPort East and Accelerate Polkadot.

The allocation will be implemented in two phases. Initially, 1 million DOT will be disbursed to attract new liquidity into the Polkadot ecosystem, offering liquidity providers (LPs) an annual percentage yield (APY) exceeding 200%. Hydration's Omnipool, designed for single-sided LP engagement, will facilitate these rewards, allowing users to earn incentives by depositing single assets or participating in incentive farms with stablecoins, DOT, and Bitcoin.

The remaining 1 million DOT will further bolster the Hydration Omnipool, strengthening the native liquidity layer for Polkadot 2.0. This supplements the 690,000 DOT already allocated to the Omnipool.

This funding initiative aims to advance liquidity management within the Polkadot network, contributing to innovation in blockchain technology. The Polkadot Protocol and OpenGov will oversee fund administration.

Jakub Gregus, co-founder of Hydration, emphasized the significance of this allocation for the project's growth, highlighting its potential impact on the Polkadot ecosystem. He stated:

"The Hydration Omnipool aims to offer unmatched efficiency and accessibility in crypto asset trading, and the support from the Polkadot treasury underscores the forward-thinking approach of our project."

This funding injection follows the recent rebranding of the project from HydraDX and coincides with Hydration reporting $28 million in total locked assets and a $50 million trading volume over the past 30 days.