Polkadot's treasury holds $245M with two years of spending left. Amid declining revenue, discussions arise on stricter budgeting and inflation rate changes. Polkdot's Treasury in Trouble? Learn How They're Fixing It!
Polkadot’s treasury, currently valued at just under $245 million, faces financial pressure with only two years of runway left at its current spending rate. The blockchain's head ambassador, Tommi Enenkel, has highlighted the need for a more sustainable financial approach and called for changes to the system’s inflation parameters.
Key Points:
Treasury Holdings:
Polkadot’s treasury has $245 million in assets, with $188 million in liquid assets.
The liquid assets are primarily in Polkadot's native token (DOT) and stablecoins (USDT and USDC).
Spending Overview:
Total spending in the first half of 2024 was $87 million.
Over 40% ($36.7 million) was allocated to advertising, influencers, conferences, and events.
Despite higher spending, Polkadot achieved better value due to DOT's peak price of $11.46 in March 2024.
Revenue Decline:
Treasury revenue dropped by 58.5%, from 414,291 DOT in the second half of 2023 to 171,696 DOT in the first half of 2024.
This decline is attributed to reduced network fees and lower inflation-based income.
Treasury Concerns:
The community is increasingly concerned about the usage and sustainability of the treasury.
Discussions are underway about adopting a stricter budgeting approach and adjusting the inflation rate.
Proposed Solutions:
Enenkel suggests creating executive departments represented as bounties and collectives for more effective treasury management.
A call to lower DOT’s 10% inflation rate to reduce selling pressure and maintain purchasing power.
Polkadot’s treasury is under significant financial strain, with only two years of spending left at the current rate. As revenue declines and community concerns rise, strategic changes are essential for sustainability.
Implementing stricter budgeting, adjusting inflation rates, and establishing executive departments could help stabilize and secure the blockchain’s financial future.
Source: Cointelegraph
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