Polkadot’s treasury currently holds assets worth nearly $245 million, providing it with approximately two years of spending at its current rate, as stated in a report from the blockchain on Friday. According to Tommi Enenkel, the head ambassador, the treasury is becoming more complex and difficult to understand, with Polkadot spending directly as well as allocating value in bounties and collectives for future use. However, Enenkel noted that due to the volatile nature of crypto-denominated treasuries, it is challenging to predict the exact timeframe. This has sparked discussions about implementing a stricter budgeting approach or adjusting the inflation parameters of the system.
The blockchain currently holds $188 million in liquid assets, primarily in its native token, Polkadot (DOT), but also in stablecoins Tether (USDT) and USD Coin (USDC). In the first half of the year, Polkadot experienced a significant increase in spending, with a total expenditure of $87 million. Over 40% of this amount, which is $36.7 million, was spent on advertising, influencers, conferences, and events.
Enenkel mentioned that despite the increase in spending, Polkadot received more value for its DOT token on average. The token’s price reached a peak of $11.46 in mid-March, the highest since May 2022. Although the price has since fallen to $6.33, it has still seen an 11% increase for the week, according to CoinGecko.
Concerns have been raised within the ecosystem regarding the usage of the treasury, as its balances have been decreasing since mid-last year. The treasury’s revenue declined by 58.5% in the second half of 2023, dropping from 414,291 DOT to 171,696 DOT, mainly due to a decrease in network fees. Additionally, the treasury’s inflation-based income decreased from 7.8 million DOT in the previous half-year to 5.2 million DOT in the first half of this year.
Enenkel suggested that the effective deployment of treasury capital could involve establishing departments represented as bounties and collectives. These “executive bodies” could be given more responsibility, as they are already increasingly taking on departmental roles within the ecosystem. Enenkel also proposed lowering the 10% inflation rate of the DOT token to reduce selling pressure, as a treasury mostly denominated in DOT relies on a stable DOT/USD exchange rate.
In an unrelated note, Polkadot’s Indy 500 driver, Conor Daly, shared that his father holds DOT, emphasizing the widespread interest and adoption of the cryptocurrency.