Cryptocurrency News

Polkadot Plans to Allocate $770 Million Worth of DOT for Ecosystem Development

By October 19, 2021 No Comments

Key takeaways:

  • On Sunday, Polkadot founder Gavin Wood announced there are 18.9 million DOT reserved in treasury for ecosystem development
  • The new development fund will help boost blockchain development on the Polkadot network ahead of parachains going live in December
  • The price of DOT has increased by 290% in the last three months

Polkadot founder Gavin Wood has recently taken to Twitter to announce the 18.9 million DOT development fund worth approximately $776 million at current market rates. The funds will go towards “building, improving, educating,” according to Wood.

Polkadot treasury funds will be distributed according to what the community deems most valuable

The co-founder of Ethereum and creator of Polkadot and Kusama has said that the allocated funds will be used on “ideas” that the “Polkadot governance believes valuable.” Polkadot treasury collects funds via “transaction fees, slashing, staking inefficiencies,” according to the project’s documentation.

Active stakeholders can propose infrastructure improvements, marketing campaigns, community outreach events, software development goals, and more. However, the Polkadot Council, consisting of 13 members, has the final say on how the treasury funds are ultimately spent.

The announcement of massive ecosystem investment comes on the heels of Polkadot parachain auctions news from last week. The first parachain auction will begin on November 11 and is slated to last seven days. The market has responded very positively to the reveal of auctions schedule as the price of DOT experienced a sharp increase and had gained more than 20% in the span of four hours on October 13, and reached the highest value in the last five months.

DOT is currently trading at $41.1 and is slowly nearing its ATH price of $49.6 that the currency reached mid-May.

Parachains are customized blockchains designed to feed into the main blockchain. Because they are tailored to project-specific use cases, parachains can achieve greater throughput while retaining cheaper transaction fees than the main blockchain. 

The $770 million development fund will likely encourage developers to begin creating Polkadot-specific blockchain projects, which will help boost the overall ecosystem activity to new heights ahead of the first batch of parachains launching on December 15.