Polkadot’s treasury currently holds assets worth nearly $245 million, which means it has approximately two years of spending left at its current rate, according to a report from the blockchain on Friday.
In a treasury report for the first half of 2024, Polkadot’s head ambassador, Tommi Enenkel, stated that the treasury is becoming more complex and harder to understand. Polkadot is not only spending directly, but also allocating value in bounties and collectives to be used in the future.
Enenkel added that at the current spending rate, the treasury has about two years before it runs out of funds. However, due to the volatile nature of crypto-denominated treasuries, it is difficult to predict with certainty. This has led to discussions about implementing a stricter budgeting approach or changing the inflation parameters of the system.
The blockchain currently holds $188 million in liquid assets, primarily in its native token, Polkadot (DOT), as well as stablecoins Tether (USDT) and USD Coin (USDC).
During the first half of the year, Polkadot experienced a significant increase in spending. It spent a total of $87 million, with over 40% ($36.7 million) allocated to advertising, influencers, conferences, and events.
Enenkel mentioned that despite the increase in spending, they were able to get more value from the DOT token on average, as its price reached a peak of $11.46 in mid-March, the highest since May 2022. Although the price has since fallen to $6.33, it has seen an 11% increase over the week, according to CoinGecko.
Concerns about the usage of the treasury are growing within the ecosystem, as noted by Enenkel. The balances have been declining since mid-last year. The treasury’s revenue decreased by 58.5% from the second half of 2023, dropping from 414,291 DOT to 171,696 DOT, mainly due to a decline in network fees.
In the first half of the year, the treasury received over 5.2 million DOT in inflation-based income, down from the 7.8 million DOT in the previous half-year.
Enenkel suggested that the effective deployment of treasury capital could involve the creation of departments represented as bounties and collectives. He also proposed lowering the “not ideal” 10% inflation rate of DOT to reduce selling pressure, as a treasury mostly denominated in DOT derives its purchasing power from a stable DOT/USD exchange rate.
In a related note, Polkadot’s Indy 500 driver, Conor Daly, expressed his surprise that his dad holds DOT, highlighting the growing popularity and adoption of the cryptocurrency.