Polkadot’s treasury has $245 million with a 2-year runway.
Polkadot's treasury holds just under $245 million in assets, giving it two years to spend at current levels, according to a Friday report from Blockchain.
The Polkadot Treasury is becoming more complex and difficult to understand, writes CEO Tommy Enenkel in a June 28, 2024 Treasury report. “Polkadot is directly extracting and allocating benefits and collections for future use.”
“At the current rate of spending, Treasuries have about a 2-year runway left, although the volatile nature of crypto-denominated Treasuries makes it difficult to predict with confidence,” Enenkel added. “This has sparked discussions ranging from a tighter budgeting approach to changing the system's inflation benchmarks.”
The block holds $188 million in liquid assets, mostly in its native token, Polkadot (DOT) but also stablecoins Tether (USDT) and USD Coin (USDC).
Polkadot had a “big jump in spending” in the first half of the year. A total of $87 million was spent on more than 40% — $36.7 million — on advertising, influencers, conferences and events.
But Enenkel said the average earned “more for DOT” than the token's 2024 high of $11.46 in mid-March – the highest since May 2022. DOT has since fallen to $6.33 but is up about 11% on the week. , according to CoinGecko.
Treasury spending is a growing concern.
Enenkel said that “the threat to the ecosystem is increasing in the use of treasury” and that the balances have been decreasing since the middle of last year.
Treasury revenue decreased by 58.5% from the second half of 2023, from 414,291 DOT to 171,696 DOT, due to a decrease in network fees.
The Treasury had inflation-adjusted earnings worth more than $5.2 million in the first half, up from $7.8 million in the previous half.
He added that “effective deployment of treasury capital” would include the creation of units represented “as endowments and collections”.
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“They're creating and playing departmental roles in the ecosystem,” Enenkel said, raising the idea of giving more responsibility.
They also called for a reduction in the DOT's “inappropriate” 10 percent inflation rate, as “most DOT-certified Treasuries derive their purchasing power from a strong DOT/USD exchange rate.”
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