20. September 2020

Polkadot Treasury opens its gates

Decentralized projects require financing options. The Polkadot blockchain shows with its treasury what such a model could look like.

The team behind the blockchain platform Polkadot has presented treasury, a reward system for their own developers. Thanks to this treasury, the community has the power to decide which projects are eligible for funding. The first development teams took up the offer already claimed and submitted funding proposals.

Polkadot is backed by the WEB3 foundation and Ethereum co-founder Gavid Wood. The platform should enable data exchange between different blockchains. She attaches great importance to governance by her own community.

Treasure trove for projects that „give momentum to the network“

The Polkadot Treasury is fed from automatically generated funds. In addition to transaction fees and slashing penalties, this also includes staking inefficiencies and parathreads. Any member of the community can use an automated protocol to submit a proposal on how to proceed with this money. In order to avoid misuse of the mechanism, each proposal must be substantiated with a sum of 5 percent of the proposed funding amount or 100 DOT tokens. The funded projects should benefit the network; they can come from one of the following areas:

Provision and continuation of the infrastructure, network security measures, ecosystem precautions (cooperation with friendly chains), marketing activities (advertising, paid functions, collaborations), community events and public relations as well as software development (wallets and wallet integration, customers and customer upgrades).

Polkadot Community decides

The decision on the allocation of funds is made by the Polkadot Council, which is made up of elected members of the community. Since one percent of the unused funds are automatically burned every day, the council has an incentive to force its way through to fund projects. In the future, the post of a special “curator” is planned, who will decide as an expert on the funding applications.

The proposals that have already been received include various infrastructure initiatives as well as a project for improved smart contracts and one for the integration of digital identities. The suggestions come from the development teams at Redsport, Centrifuge, Polkascan and Encointer.

In addition to the actual project funding, the funds can also be given out as „tips“ for committed community members. People who do translation work for Polkadot or write articles are also rewarded for their efforts.

In the meantime, a comparable initiative has formed in the Ethereum ecosystem with the Gitcoin Grants . Ethereum enthusiasts can make donations to help expand the network. Thanks to large donors such as the Ethereum Foundation, considerable amounts have recently been raised.