Stakeholders in the Polkadot ecosystem have refuted claims that the network’s treasury will run out within two years.
A recent treasury report raised concerns among the community, claiming that the project’s current spending is only enough to sustain operations for two years. However, some stakeholders have refuted these claims, explaining that the Polkadot Treasury is constantly replenished by the network’s token inflation.
Ben McMahon, ecosystem lead at Hydration, emphasize that unlike traditional budgets with fixed allocations and limited time (runway), Polkadot’s treasury is continuously replenished from a portion of the network’s inflation. He clarified that the treasury funds are allocated not only for marketing activities but also to fund liquidity campaigns, DeFi infrastructure development, ecosystem audits, and security initiatives.
“Most importantly, this spending is decided by DOT holders through onchain voting and is done automatically.”
Giotto de Filippi, the head of Polkadot’s largest memecoin, DED, described the Treasury as “self-sustaining” and believes it can last indefinitely.
“When Polkadot launched, the treasury was zero. And it started slowly accumulating from inflation. And yes it was spent, but it also kept growing. So the great thing about Polkadot is instead of just giving inflation to the people who were staking and securing the network, the inflation was split into two. Some went to the people who secured the network and some went to the Treasury.”
Giotto further noted that the Treasury operates like a DAO, where token holders vote on various proposals, from marketing to corporate development funding and development payments for tools like the Block Explorer.
Meanwhile, Filippo Franchini, a technical educator at the Web3 Foundation, added that the Treasury holds less than 2% of the DOT supply. ensure that the network would still function even if the Treasury ran out but expressed confidence that the Treasury would not run out of money.
“I really don’t believe that the treasury will run out anytime soon because it is a resource that needs to be protected. The treasury is going through a process of diversifying into stablecoins, and there has been a discussion about depositing a fixed portion of DOT inflation into the treasury.”
Itadori
According to Cryptoslate
