Polkadot community greenlights continuous funding for ecosystem innovators Polkadot community greenlights continuous funding for ecosystem innovators
Polkadot's model mirrors Ethereum layer-2 Optimism's Retroactive public goods funding (RetroPGF) mechanism.
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Updated: May. 24, 2024 at 5:24 pm UTC
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The Polkadot community has approved the Optimistic Project Funding proposal to support projects that enhance the blockchain network’s ecosystem.
The proposal received unanimous approval, backed by over 55 million DOT tokens.
Optimistic Project Funding
Polkadot aims to attract top developers by providing continuous and dynamic funding for their projects. This proposal allows projects to apply for funding through a referendum, voted on by all token holders.
Eligible projects include parachains, decentralized applications, and ecosystem wallets. While there are no strict guidelines on fund usage, community votes may consider the projects’ spending plans.
DOT holders also have the option to vote against funding projects they find undesirable or malicious.
Ben McMahon, the proposal’s creator and Ecosystem Lead at HydraDX, told CryptoSlate that Polkadot has a powerful Treasury that has not always been effectively utilized. According to him, this feature allows token holders to directly direct some of DOT’s inflation to projects they believe benefit the ecosystem most.
In a social media post, McMahon further explained:
“Once implemented, this feature will allow for users to nominate whitelisted projects with their DOTโthis mechanism will be funded by a constant stream of DOT taken directly from inflation and distributed to projects based on the proportion of DOT that has nominated them.”
McMahon noted that this funding mechanism is similar to Optimism’s RetroPGF round, which rewards ecosystem contributors for their past work. Since the model’s introduction in 2021, Optimism has received praise from crucial crypto figures, including Ethereum co-founder Vitalik Buterin, for supporting developers and contributors who build public infrastructure without traditional business models.
Meanwhile, the proposal passage has drawn positive reactions from the Polkadot community, with many pointing out the massive impact it would have on the ecosystem.
Giotto De Filippi, the chief memer at DED, said:
“The DOT protocol will reward your project in a continuous way by giving it a percentage of the daily inflation according to how much they believe your project is beneficial for Polkadot; this is determined by the vote of the DOT holders so it is completely decentralized and democratic.”
Disclaimer: CryptoSlate has received a grant from the Polkadot Foundation to produce content about the Polkadot ecosystem. While the Foundation supports our coverage, we maintain full editorial independence and control over the content we publish.
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Optimism is a layer-2 scaling network for the Ethereum blockchain.
