The Polkadot Foundation released its financial report for the first half of 2024 last weekend. The report reveals that the foundation spent $87 million (equivalent to 11 million DOT) in the first six months of 2024. Approximately $36.7 million was allocated for expanding services (about 42%), $23.1 million for development (about 26.7%), and $15 million for the ecological economy (about 17.6%).
However, the most criticized aspect by the community is the significant resources invested by the Polkadot Foundation in marketing budgets, yet there is still a lack of visibility of Polkadot-related news in the market, with minimal discussion in the community over the past six months. Upon closer inspection, it is noted that Polkadot’s marketing budget primarily focuses on sports event sponsorships, such as sponsoring a prominent football club with $6.8 million, F1 racing sponsorship with $1.9 million, among others.
Currently, the Polkadot Foundation controls assets worth $245 million across three different blockchain networks, with $188 million classified as “illiquid” and unable to be immediately liquidated. According to official statements, at the current spending rate of $87 million per half-year, the foundation would incur an annual net loss of approximately $108 million (equivalent to 17 million DOT). If the DOTUSD exchange rate remains unchanged, the remaining funds of the Polkadot Foundation would be depleted within two years.
Furthermore, with DOT experiencing a yearly inflation rate of 10%, with the majority directed towards staking rewards, it means that at a $10 billion market cap, $1 billion annually flows to stakeholders.
This presents a significant security cost for a network with not many active users. Despite official attempts to propose a reduction in the inflation rate, the proposal was ultimately rejected with a 57% opposition vote.
