Polkadot’s treasury assets are nearing $245 million, ensuring about two more years of expenditure at the current pace. Chief ambassador Tommi Enenkel highlighted in the mid-2024 treasury report that understanding the treasury’s complexities has become increasingly difficult.
What’s Driving Polkadot’s Spending?
Tommi Enenkel, Polkadot’s ambassador, stated that the organization is allocating funds strategically for future rewards and collectives. He emphasized that the treasury’s volatile nature makes it hard to predict its longevity accurately, leading to discussions on stricter budgeting and potential changes to the system’s inflation parameters.
The blockchain’s liquid assets, valued at $188 million, primarily consist of the native token Polkadot, along with stablecoins like Tether and USD Coin. Polkadot’s spending surged in the first half of this year, reaching $87 million, with over 40% dedicated to marketing, influencers, and events.
How is Polkadot’s Treasury Performing?
Despite the token’s peak price of $11.46 in March 2024, it has since dropped to $6.33, though it recently enjoyed an 11% weekly increase. Enenkel noted that treasury balances have been declining since mid-2023, raising concerns about its utilization within the ecosystem. Revenue from network fees plummeted, leading to a 58.5% reduction in treasury income.
Revenue from inflation decreased to 5.2 million DOT in the first half of this year, down from 7.8 million DOT the previous half. Enenkel suggested enhancing the responsibilities of executive bodies within the ecosystem, which are forming various departmental roles.
Key Takeaways for Stakeholders
- Focus on stricter budgeting approaches to manage the treasury effectively.
- Consider reducing the current 10% inflation rate to mitigate selling pressure.
- Enhance the roles of executive bodies for better ecosystem management.
- Monitor market conditions closely to adapt strategic spending plans.
In conclusion, Polkadot is making significant efforts to manage its treasury through strategic spending and careful allocation of resources, despite the challenges posed by market volatility and declining revenues. Stakeholders are urged to stay informed and proactive in addressing these financial dynamics.