Polkadot’s treasury holds assets valued at just under $245 million. Spending from the treasury saw a significant increase in the first half of the year. DOT’s price reached a high of $11.46 in mid-March but then fell to $6.33.
According to a report released on June 29, Polkadot’s treasury currently holds assets worth just under $245 million, which is enough to cover about two years of spending at the current rate. Tommi Enenkel, Polkadot’s chief ambassador, noted in the June 28 report for the first half of 2024 that the treasury is becoming increasingly complex and harder to manage.
Polkadot’s Treasury Spending and Asset Management Update
Polkadot ambassador Tommi Enenkel recently shared insights on the treasury’s spending and future allocation strategies. Enenkel highlighted that at the current spending rate, the treasury has approximately two years of funding remaining. However, the unpredictable nature of cryptocurrency treasury bonds complicates accurate predictions. This has led to discussions about adopting stricter budgeting approaches or modifying the system’s inflation parameters.
The blockchain’s treasury holds $188 million in liquid assets, primarily in Polkadot’s native token, as well as stablecoins like Tether and USD Coin. In the first half of the year, Polkadot increased its spending significantly, totaling $87 million. Over 40% of this expenditure was allocated to advertisements, influencers, conferences, and events.
Enenkel also noted that DOT’s price peaked at $11.46 in mid-March, generating significant hype. Since then, the price has dropped to $6.33, although it has seen an approximate 11% weekly increase recently.
Concerns Over Polkadot’s Declining Treasury Balances and Usage
Tommi Enenkel highlighted that Polkadot’s treasury balances have been decreasing since the middle of last year, raising concerns about how the funds are being utilized within the ecosystem. Treasury revenue dropped significantly by 58.5% from the second half of 2023, falling from 414,291 DOT to 171,696 DOT, primarily due to reduced network fees. Additionally, the treasury’s inflation-based revenue decreased to 5.2 million DOT in the first half of the year, down from 7.8 million DOT in the previous half.
Enenkel suggested that greater responsibility should be given to executive bodies, as they are increasingly taking on departmental roles within the ecosystem. He also recommended reducing DOT’s current 10% inflation rate to alleviate selling pressure. Since the treasury’s purchasing power largely depends on a strong DOT/USD exchange rate, lowering the inflation rate could help stabilize the token’s value.
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