[Polkadot only spent $1 million from finance due to marketing disagreements]
Polkadot (DOT) was criticized for abusing its marketing budget and subsequently reduced the spending of treasury funds. Polkadot’s treasury has been in the red over the past 12 months, with spending in April and May 2024 being particularly significant. Net outflows exceeded $1 million last month, following net outflows of more than $3 million in the previous months. Recent votes cut automatic replenishments of marketing funds.
Polkadot first issued the Wemix token in 2020 to support its games, but due to a smart contract mishap, major ICO funds were locked up. Despite a generous marketing budget, the project's social media presence lagged.
As of July 2024, Polkadot had $25 million in funding across 32 active bounty programs, but funds automatically awarded to content creators have raised concerns. The main spend was on KOL marketing, with 15 top accounts receiving $390,000, but the funds were either spent on low-engagement posts or low-quality promotion.
Additionally, Polkadot spent $36.7 million on marketing and outreach, with more than $4.8 million paid directly to KOLs. The treasury payment is equivalent to 4.9 million DOT tokens. Polkadot’s marketing strategy began to shift toward more prominent social media accounts and removed auto-replenishment, which had previously been criticized for low-quality promotion.
In the first half of the year, Polkadot released $87 million in treasury funds, a large portion of which was used for direct on-chain spending and liquidity. About $24.5 million has been set aside for rewards and incentives, including marketing. The community is opposed to supporting NFT projects in the deteriorating encryption market. Polkadot is now adopting a tightening marketing strategy and no longer relies on KOL and KOL promotion, mainly because treasury funds can only support it for another two years.
The worst impact is that KOLs and content creators are paid in DOT, which ultimately creates selling pressure. DOT rose to $10 in 2024, but then slipped to $4.37. Free spending from the treasury ends up hurting DOT rather than promoting the token. Social media users are skeptical of the way KOLs promote DOT, even when active in the first half of 2024.
