July 24, 2024
Latest Cryptocurrency News

Polkadot’s Treasury Faces Misconceptions About Financial Runway

Polkadot’s treasury holds assets of just under $245 million, leading to misconceptions about its financial stability. Despite community concerns, this does not imply a limited two-year runway.

A recent report suggested the project’s budget could only last two years at the current spending rate, sparking discussions about budgeting and inflation parameters.

However, the treasury’s continuous replenishment from staking rewards ensures sustained funding.

Spending and Financial Health

The blockchain’s liquid assets include $188 million in Polkadot tokens, Tether, and USD Coin. In the first half of 2024, Polkadot experienced significant spending, with $87 million allocated, including $36.7 million on marketing and events. Although the token’s value peaked at $11.46 in mid-March, it later dropped to $6.33, reflecting volatility in the crypto market.

Polkadot’s expenditures on advertising. Source: Polkadot

Future Strategies and Treasury Management

Polkadot’s treasury balances have decreased since mid-2023, with revenue from network fees dropping 58.5% from the previous half-year. Despite this, inflation-based income contributed significantly, with over 5.2 million DOT in the first half of 2024.

Treasury balances (dark orange) have decreased since mid-2023. Source: Polkadot

To optimize treasury capital deployment, creating departments represented as bounties and collectives is being considered. Reducing DOT’s 10% inflation rate to lower selling pressure has also been proposed to maintain a stable DOT/USD exchange rate.

Image by kstudio on Freepik

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

Related posts

Sexual Harassment Allegations at FDIC Trigger Crypto Leaders to Reevaluate Traditional Finance

Henry Clarke

Pro-Bitcoin Candidate Javier Milei to Face Off Against Sergio Massa in Argentine Runoff Election

Bran Lopez

Republic Unveils Profit-Sharing Blockchain Token for Retail Investors

Bran Lopez

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Please enter CoinGecko Free Api Key to get this plugin works.