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Polkadot Faces Strong Criticism Over Excessive Marketing Spending

Polkadot's report revealed that the project's operating expenses in the past 6 months amounted to $87 million, of which $37 million was allocated to marketing.
Polkadot spent $37M on marketing

The Polkadot (DOT) community is debating the latest project activity report for the first half of 2024, revealing expenditures totaling $86.5 million (11.1 million DOT).

Report Details:

  • Operating Expenses: Polkadot spent $86.5 million (equivalent to 11.1 million DOT) in the first half of 2024. This expenditure is more than 2.4 times the 5 million DOT in the second half of 2023.
  • Revenue: Over the past 6 months, Polkadot only generated 171,696 DOT, a decrease of nearly one-third compared to Q2/2024.
  • Reason for Significant Spending: Polkadot representatives explained that the cryptocurrency market recovery has attracted ambitious ecosystem development proposals. With DOT prices rising, the expenditure value in USD has also increased more than when calculated in DOT.
  • Largest Expenditure: The community development category accounted for 4.9 million DOT ($36.7 million), including advertising, sponsorships, media relations, and event organization.

Meanwhile, project revenues over the past six months amounted to only 171,696 DOT, a decrease of nearly one-third compared to Q2/2024.

Explaining the sharp increase in spending, Polkadot representatives attributed it to the cryptocurrency market’s recovery in the first half of the year, which attracted numerous ambitious ecosystem development proposals requiring substantial funding. The report also noted that thanks to the recovery in DOT prices, expenditure measured in USD increased significantly compared to DOT-based calculations.

The largest expenditure category was community development, totaling 4.9 million DOT, equivalent to $36.7 million. This category includes advertising, sponsorships, media relations, and event organization. It has also sparked considerable debate within the community, with some questioning whether such large expenditures have yielded proportional returns for Polkadot, especially considering the project’s social media presence, particularly on Twitter, has been minimal.

Some critics have sarcastically argued that the controversial spending might ironically be what brought Polkadot back into the spotlight after several years, despite spending millions on Key Opinion Leaders (KOLs) to create promotional content about the project.

The report also addressed Polkadot’s remaining treasury assets, currently holding 32 million DOT (200 million USD). Given the current spending rate, Polkadot acknowledges it will only have sufficient funds to operate for another two years, assuming DOT prices remain stable.

Another concern for Polkadot’s development prospects is the current inflation rate of DOT, with 10% of the circulating supply being annually issued as staking rewards.

Polkadot representatives acknowledge community concerns regarding expenditure and inflation, urging all parties to dialogue to find mutually beneficial solutions through governance efforts.

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