Polkadot treasury holds $245M, remains robust despite revenue fluctuations Polkadot treasury holds $245M, remains robust despite revenue fluctuations
Polkadot's significant investment in ecosystem growth has resulted in a substantial treasury, continually funded by token inflation, ensuring ongoing financial support.
2 min read
Updated: Jul. 2, 2024 at 12:35 pm UTC
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Update on July 2nd at 12:30 WEST: Clarification on Polkadot Treasury Funding
In response to feedback, we have updated the content of this article to clarify that Polkadot’s treasury, although reflecting approximately two years of current spending, is continually funded by token inflation. This ensures ongoing financial support for the network and dispels any misconception of a limited runway. Below is the revised article reflecting these changes.
The Polkadot Treasury holds assets equivalent to 38 million DOT, worth approximately $245 million. Head Ambassador Tommi Enenkel, popularly known as Alice and Bob, shared a new report providing the latest update on the network’s treasury.
Despite initial concerns about a two-year “runway,” it is important to clarify that the treasury is funded by inflation, ensuring continuous financial support. The report stated:
“At the current rate of spending, the Treasury has about two years of runway left, although the volatile nature of crypto-denominated treasuries makes it hard to predict with confidence.”
Polkadot’s first six months of spending
During the first six months of this year, Polkadot invested heavily in its ecosystem, spending 11 million DOT, valued at around $87 million, across various projects.
According to the report, the network invested about $37 million in outreach activities such as advertisements, sponsorships, and events. The network signed sponsorship deals with race car driver Conor Daly and also pushed several marketing activities designed to bolster the network’s adoption by the broader global community.
Polkadot also spent $23 million developing its network features and upgrades, including SDK, Data Services and Indexing, Governance, and Subwallets.
Moreover, the network invested $15 million in liquidity incentives and $5.5 million in Talent and Education. Additionally, it spent $3.8 million to maintain the network and core ecosystem components, and another $2.1 million went towards Research.
Revenue fluctuations
The report highlighted a decline in Polkadot’s revenue. During the first six months of the year, the network’s total earnings dropped to 171,696 DOT from 414,291 DOT, recorded in the second half of 2023.
Enenkel attributed this decline to the significant drop in network fees, which fell from 313,443 DOT last year to 39,444 DOT in the 2024 first half:
“We see that direct revenue from fees is still marginal. Polkadot made 300k DOT from fees in 2023-H2 from a short-lived inscriptions campaign. Fees under regular conditions are pretty stable with about 20k DOT per quarter. Other sources of revenue are typically transfers from accounts that return funds that they received and pay them back for various reasons.”
While revenue from fees has declined, the ongoing token inflation continues to provide a steady stream of funds to the treasury, ensuring Polkadot’s capacity to support its ecosystem in the long term.
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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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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