Polkadot's Treasury: Insights on Spends and Burns

Key insights:

• Treasury spending hit an all-time high and is set to hit a second-highest payout
• DOT amount in Treasury is down by ~23% in 2024
• Over $13 million worth of DOT has been burnt in 2024

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Currently, the Polkadot treasury is at a balance of ~33.5m Dot. That’s ~20% less than it was at the start of 2024. Since July 2023, It has consistently dropped and it’s set for another large spend. What is driving this trend?

Treasury Spends

The consistent dip in treasury since July 2023 was primarily driven by the launch of OpenGov on Polkadot in June 2023. OpenGov has encouraged more people to put forth proposals to provide value to the ecosystem, with the community deciding what proposals to fund. Many unique proposals have been been funded since then.

At the end of each Spend Period (currently 24 days), requested funds are paid out to proposals that have been approved for funding.

At the end of the last Spend Period on 18th April 2024, the treasury made its most payout of ~3.95 million DOT. Over 3x the previous peak treasury spend. The spent went to proposers such as the Indy500 sponsorship to promote Polkadot. First of its kind in Polkadot!

The treasury is set to payout over 2.2m DOT at the end of the current Spend Period which is on 12th May 2023. This would be treasury's second-highest payout to date.

The payout will include that of the Kusamarian, Mythical Games, etc. Each proposer potentially brings loads of value to the ecosystem.

Their track record speaks volumes!

While there is much spending, there is less DOT burn.

DOT Burn

The burn rate of DOTs from the Treasury is set at 1% of available balance on treasury at the end of every Spend Period.

Since the start of 2024, ~1.9 million DOT worth over $13 million has been burnt from the treasury.

The burning is meant to create deflationary pressure and encourage the community to spend the treasury funds.

At the end of the last spend period, ~332,681 DOT worth over $2.2 million at that time were burnt. This amount of burned DOT is ~9.6% less than the previous burn.

Considering there has been over 1.9 million DOT spent from the treasury in 2024, is the treasury burning too much DOT?

The next burn is at least 335.03K DOT worth over $2.4 million, and the next spending is over 2.2 million DOT worth over $15 million.

Will the community continue with spending spree or dial down a bit? Please, share your thoughts.