Crypto community blasts Polkadot following report of treasury spending

Polkadot announced in its recent treasury report that it spent more than $87 million in the first half of 2024, reducing its balance to $245 million. The report attracted harsh responses from the crypto community on Tuesday, suggesting that the high spending hasn't translated to network growth for the platform.

DOT risks price decline following heavy H1 treasury spending

Blockchain interoperability protocol Polkadot has been a major subject of discussion across the crypto community following its recent announcement that it spent $87 million worth of DOT tokens on various activities in the first half of the year.

Polkadot revealed this high spending via a treasury report that it released over the weekend. The report noted that 13% of the funds went through executive bodies such as bounties and collectives while highlighting the assets held by Polkadot's on-chain treasury over three distinct chains. The treasury now manages $245 million in assets, of which $188 million are liquid.

The breakdown of the spending highlights $37 million in advertisements, events, and meetings to gain wider recognition in its ecosystem. On Polkadot-based trading platforms, $15 million was spent on incentives and liquidity provision. Developments also cost $23 million in the year's first half. Outreach costs rose to 42% from 29% in the previous year.

The total spending attracted a lot of criticism, as crypto community members expressed harsh displeasure towards the report.

Victor Ji, co-founder of Manta, stated:

"As the founder of the previous largest (non-DOT) TVL and market cap/FDV project in the Polkadot ecosystem, I have to say that we do not want to engage with the Polkadot ecosystem and team at all. It is a highly toxic ecosystem that lacks any real value for web3, and it does not focus on users or adoption at all."

Another X user, @Ignas, also noted that the spending hasn't reflected in the growth of the Polkadot ecosystem. "Polkadot spent $37 million in outreach during the first half of 2024, targeting new users, developers, and businesses [...] Yet Polkadot still seems invisible on X and elsewhere."

DOT's price has increased following the report, trading over 2.5% over the last 24 hours. However, Polkadot lags far behind other Layer 1s like Ethereum and Solana in network activity, developer activity, adoption rate, revenue, total value locked, etc.

Some crypto community members have speculated that the backlash may cause DOT to see a correction in the coming days when the market prices in its depleted treasury.