# Auto-Swap Mechanism for Token Funded Proposals

**URL:** <https://forum.polkadot.network/t/auto-swap-mechanism-for-token-funded-proposals/12315>\
**Category:** Ecosystem\
**Created:** [March 31, 2025, 8:31pm UTC](https://forum.polkadot.network/t/auto-swap-mechanism-for-token-funded-proposals/12315 "2025-03-31T20:31:09Z")\
**Posts on this page:** 1\
**Page:** 1

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**Author:** ![Murphy](https://dub1.discourse-cdn.com/flex005/user_avatar/forum.polkadot.network/murphy/32/7451_2.png) [@Murphy](https://forum.polkadot.network/u/Murphy)\
**Post date:** [March 31, 2025, 8:31pm UTC](https://forum.polkadot.network/t/auto-swap-mechanism-for-token-funded-proposals/12315/1 "2025-03-31T20:31:09Z")

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**Problem** - The recurring issue in Polkadot OpenGov is the mismatch between funding requests denominated in DOT/KSM and budgets expressed in USD. Proposers asking for tokens face exposure to price fluctuations between the time of proposal and the moment funds are liquidated leading to:.

1. Windfall – If ‘token’ appreciates, the recipient may receive more than requested (rarely refunded and historically poorly policed).
2. Shortfall – If ‘token’ depreciates, the recipient is underfunded and may request additional support.

Stablecoin reserve within the Treasury have been a good solution but still have some friction (manual top-ups, referenda), may run out before a subsequent round of DCA executes and it has potential alignment issues (e.g., reliance on the treasury to hold increasing amounts of non-native, potentially non collateralised stablecoins for long periods).

**Proposal** Create a middleware auto-swap mechanism whereby proposers can opt-in and request funding in DOT/KSM, but upon proposals passing, the token is first automatically routed through a decentralised application which undertakes a stablecoin swap before being sent onto recipient.

This should improve predictability, reduce volatility risk, and perhaps remove some burden from treasury stable management.

Optionally, proposers can opt-in to this flow during proposal submission and may find that their proposal has a higher chance of success by doing so (particularly at times when stable reserves were low or their ask was large.)

**Considerations**

- Technical Challenge: I have no idea if this is even possible! How much have I underestimated the complexity!?
- DEX Liquidity/ slippage
- Transparency & Consent: Proposers must understand and agree to conversion terms up front.
- Cost to build - perhaps a chance for RFP.
- What other risks?