The latest Polkadot Treasury Report revealed that $37 million was spent on outreach in the first half of 2024, targeting new users, developers, and businesses.
This included $10 million on ads or sponsorships, $4.4 million on influencers, and $4 million on digital ads. However, according to a post from a Defi analyst on X, Polkadot still appears to be less popular on X and other platforms.
Polkadot’s forum provides additional details. They define outreach as every expense intended to attract new developers and users to the ecosystem. This spans from media and advertising to conferences and business development.
Polkadot’s Treasury spends directly and allocates value in collectives and bounties to spend in the future. Its Hydration and AssetHub chains hold DOT as well as USDT and USDC stablecoins. In the first half of this year, the Treasury spent $87 million (11m DOT), and executive bodies spent 13% of this amount.
According to the most recent forum data, the Treasury manages $245 million (38 million DOT) in assets, of which $188 million is liquid. Polkadot allocates $24.5 million to several executive bodies for strategic initiatives like gaming, marketing, BD, etc., and $6.4 million for gaming airdrops.
Does Polkadot Have Just Two Years to Go Bankrupt?
The Defi blogger and analyst contends that at this burn rate, the platform will face insolvency in less than two years. The report published on the forum confirms this:
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.
Potential Solutions
Potential solutions could involve implementing stricter budgeting and adjusting the system's inflation parameters. The report highlights a noticeable shift towards centralization, with executive bodies increasingly taking on departmental responsibilities within Polkadot.
The platform believes that giving more authority to these bodies will help address concerns. According to them, the executive bodies comprise individuals with expertise in specific areas who collaborate to review new proposals.
They have collectives, such as subDAOs, that possess OpenGov capabilities. The report strongly suggests that OpenGov stakeholders should start playing a significant and influential role in decision-making. Their expertise and insights are invaluable for Polkadot's future.
In the future, Treasury funds will be allocated by establishing departments represented as collectives and bounties. OpenGov will have control over outcomes, and the performance and efficacy of executive bodies will be evaluated. OpenGov will play a crucial role in negotiating budgets and determining their allocation among the executive bodies, ensuring transparency and accountability in fund management.
Moreover, a recent poll on whether to decrease inflation ended with 57% of Polkadot community members disagreeing with the proposal. The report concludes that the selling pressure from stake-to-sell users, which lower inflation would correspondingly reduce, would "significantly outpace" any pressure created by the Treasury.
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