DOT Way Forward! (July 21st to July 27th)

What is up, my friends!

Not to be outdone by the previous week, this past week has been quite turbulent. With the US election impacting crypto, the week started off with the news of Biden dropping out and was followed by Harris stepping in.

Various crypto media outlets took to trying to comprehend where the current Veep stands on crypto. Although nothing has been confirmed yet, many, including The Defiant, report her ties with the California tech world as positive.

Finally, ETH ETFs have launched, and thus far, there seems to be a similar downward reaction as when the BTC ETFs launched. In any case, with the week culminating in BTC Nashville and Trump lined up on the Nakamoto stage, things might get yugely interesting.

While things are taking shape stateside, this week the debate within the Polkadot ecosystem has similarly centered around paving the way forward. Our top story will cover DOT debates on Inflation and the Ambassador Program. We will also touch upon the more contentious and hotly debated marketing initiatives.

For those more interested in debating on new investment opportunities, check out this week’s featured update. We explore the way forward for decentralized funding as we recap what’s been happening on Polimec.

Regarding the debate on the Ambassador Program, WagMedia did get a positive mention by Shawn Tabrizi. Perhaps, this sentiment can be backed up by the WagMedia data report volume 4, which covers up to 24th June, and recently published by Vampsy.

Without further delay, let’s get into the debates and decentralized funding happening on Polkadot, as well as the news updates from our Finders Program.

Dodow, Chief Editor

Top Story of the Week - DOT debates

Written by yay.oi

What’s grazin’, bovines? While you’ve been out there chewing the cud, an absolute dungstorm has been brewing in the Polkaverse. You may be wondering why don't muzzle the ox(no, not that 0x) is suddenly the hottest phrase in Polkaville. In case you're not theologically inclined, it's a biblical phrase meaning your ox deserves to eat while it's working. Effort warrants incentive, and we can’t forget that in the Web3 world, because incentives run the whole darn rodeo.

Inflation is the primary source of incentives in the Polkadot ecosystem, but it has also come under fire for the downward pressure it applies to the DOT token. Currently, inflation is 10%, with a variable proportion of the newly minted tokens going to stakers and the treasury.

The current inflation model incentivizes achieving an ideal staking rate of 60%. If the number of staked tokens drops lower than that, stakers are incentivized with higher yields, and if they rise higher, APYs drop significantly. The amount of inflation that goes to the treasury is 0% when the ideal staking rate is maintained, but increases with deviation in either direction.

Are you following? I could elaborate to explain the yield curves in more detail, but many would agree that it's already becoming complicated. In his proposal for adjusting Polkadot’s inflation system, Web3 Foundation’s Jonas Gehrlein argues that the complexity of the current inflation model has become largely redundant. With the introduction of coretime sales and revenue burning, we no longer need a system to try to achieve a balance between staked tokens, bonded crowdloan tokens, and liquid DOT.

Jonas presents a new, simplified model for Polkadot inflation, making use of features available in the next runtime upgrade, that offers the flexibility to lower inflation and provide a fixed rate of treasury income. His model removes the ideal staking rate, so staking APYs would simply decrease as the staking rate increases.

With treasury inflow fixed at 15% of inflation, 6.8% would go to stakers, and 1.2% would go to the treasury. The result would be a fixed treasury income of 1,155,539 DOT per spending period (24 days) and, at the current staking rate, an APY of 11.62%.

Jonas’s model still results in exponential inflation, which has a negative perception by many. According to Alice und Bob’s alternative model, fixing inflation at 100M DOT per year would result in linear inflation, with the effective inflation percentage diminishing over time. This model offers further simplification, which could appeal to the masses.

While stakers anxiously wait to see what the future holds for their APYs, 21 new Polkadot Head Ambassadors may be getting nervous about their promised $120k pa salary. Polkadot Fellow Shawn Tabrizi thinks that the new Ambassador’s Collective should not be funded yet and has proposed a complete restructuring of the Ambassador Program.

In his Ambassador Program 2.0 (Shawn’s Vision) he proposes up to five full-time Ambassador Management positions, each compensated at OECD average salaries for Project Managers. As for the different tiers of Ambassadors, they would be expected to apply for compensation through treasury proposals.

Shawn’s vision works on a principle of frugal compensation for time worked, and generous reward for value added. For example, an ambassador could request a tip of $200 for creating a YouTube video, and then a $20,000 reward if it achieved 1M views.

No strangers to generous rewards, the beneficiaries of Marketing Bounty 33 may need to start considering an alternate source of funding – unless this discussion gains some traction. With the rejection of Bounty Topup Referendum #920, only 9310 DOT remain in the coffers. Despite only accounting for 25% of Outreach spending (note that 50% went to sponsorships) in the Polkadot H1 Treasury Report, it looks like voters have used Bounty #33 to send a message about future marketing spending.

However, the AMI (Autonomous Marketing Initiative) Bounty #46, which prides itself on transparency, accountability, and frugality, has also come under fire. OpenGov Referendum #1033 proposes to shut it down, claiming that it has failed to deliver any tangible results.

It seems that in their efforts to build the most transparent and accountable bounty, they’ve become bogged down in their own bureaucracy. Since inception, they’ve paid 1663 DOT to marketing initiatives, and incurred 3338 DOT in administrative expenses.

That said, their administrative expenses are likely to be lower from now on. While curators are paid $1000 for their first month of work (seed curators also received some hourly reimbursements for time spent setting up the bounty), after that, they only share a commission from their successfully curated marketing projects. This should result in significantly lower curator expenses compared to the Events Bounty, for example, where curators receive $4000 per month for approximately 20 hours of work, regardless of results.

So, what’s all of this got to do with oxen, you ask? Well, according to Shawn Tabrizi, no curator should be taking payment from the bounty funds. He believes that curators should apply directly to the treasury for retroactive payment, and implied that a curator that does take payment from the bounty is a grifter.

Now, our friend Adam Clay Steeber, took offense at being labeled this way, which kicked off a war of words, and the rant that included the now famous don’t muzzle the ox line. Now that they’ve got the whole community’s attention, the Bounty #46 curatorship has their work cut out for them defending line items on their expense reports, and trying to explain their complex web of bureaucracy to the common voter.

In AAG #151, Leemo phrased it perfectly, you need to dumb stuff down, and make information easy to access and quick to read. Bounty #46 is one of the first with such a comprehensive charter and framework, their efforts should be commended and built upon, regardless of if the bounty continues.

There is a common theme emerging in all of the debates of the Polkadot ecosystem. A proposal is more likely to succeed if everyone can understand it. That doesn’t necessarily mean that an overly technical proposal is doomed to failure, but someone needs to be able to communicate the idea clearly for general audiences.

This is why people are supporting Shawn Tabrizi’s revised Ambassador proposal, which clearly communicates that it stands for effective spending and more accountability. Similarly, Alice und Bob’s version of the inflation proposal is gaining support because it is easier to digest.

Clear communication is the key to successful marketing. However, convincing the Polkadot community to spend on marketing after recent events is a tough sell. Whoever can pull it off will have the communication skills to shine in both marketing and governance, and will be worth their weight in DOT.

Featured Update - DOTcentralized Funding

Written by Sanchez

The initial community sales for Polkadot ecosystem projects were primarily conducted on Tokensoft. This included presales for highly anticipated, well-supported projects such as Moonbeam, Acala, Manta, and others. In most cases, community members who supported their crowdloans on Kusama significantly benefited from these sales as they had first-class access.

At that time, the markets were booming, with KSM exceeding $300 and Kusama crowdloan projects offering impressive returns. The imminent launch of parachains on Polkadot fueled similar expectations, likely prompting more projects to set up presales to raise funds quickly.

Many were eager to participate in these sales, seizing every opportunity. Projects, in turn, offered their tokens with arguably high FDVs, yet there was still strong uptake, and most sold out.

It all seemed great—until it wasn't. Only a few projects launched and distributed tokens to participants before the market downturn caused their valuations to nosedive. Although there were a few exceptions, many investors have been barely able to break even on their initial investments.

Several projects today still suffer from the impact of what can now be considered expensive token sales. Presale participants frequently berate them for over-promising and under-delivering, even though no explicit promises of returns were made.

Three years later, Polimec has established a transparent and fully decentralized fundraising platform for projects within, and eventually beyond the Polkadot ecosystem. Recently, it completed its first successful fundraising operation, with more in the pipeline.

A key aspect of the Polimec mechanism involves evaluators. Projects present their token sale prices and other relevant information, and evaluators must use their tokens to show confidence in these values for community consideration.

If a project raises less than 33% of its funding target, the evaluator's PLMC is slashed. Evaluators are only rewarded if the funding reaches or exceeds 90% of the target. You can read our previous newsletter covering Polimec and its fundraising process for more details.

The first project to attempt fundraising on Polimec was Apillon, a unified gateway to Web3 services via linked Polkadot parachains. Apillon aimed to raise $500K but only secured $70,111, 14% of the target, resulting in the cancellation of the funding round and the return of funds to contributors. Additionally, the PLMC of evaluators was reduced by 20%.

It’s difficult to say if potential investors questioned their funding history, which we covered in our previous newsletter. The unsuccessful fundraising effort could likely be due to uncertainty, as Apillon is the first project to raise funds through Polimec. Despite this, the Apillon team is moving forward. They have launched the process for pre-seed investors to claim the NCTR token, which is now live on the MEXC exchange and will soon be available on Stellaswap on Moonbeam.

Next to fundraise on Polimec was ImpactScope, which became the first project to successfully do so. ImpactScope helps organizations deploy AI and Web3 tools to measure, verify, and amplify their sustainability achievements, as well as tokenize impact outcomes. Founded in 2019 by Sean Murphy and Gregg Betz, the project is headquartered in Geneva, Switzerland.

The team aimed to raise $300,000 and secured $100,154 from 53 participants equal to 33% of their target. The team accepted the amount raised, as projects have the option to accept funds below 75% of their target. However, the PLMC of evaluators was slashed by the set 20%, as the funds raised were below the threshold of 75%, which guarantees no slashes.

ImpactScope previously raised approximately $160,000 from a strategic investment with Insig AI, acquiring 900,000 shares. This deal included an option for additional subscriptions totaling $880,000, valuing the company at $11 million.

A highly anticipated project currently fundraising on Polimec is Mandala Chain. This hybrid layer 1 blockchain project addresses the need for secure and confidential data storage and transfer. It aims to connect retail, governments, and enterprises, beginning with the Indonesian government and its expanding list of partners.

With a funding target of $250,000 and an FDV of $20 million, the $25,000 evaluation target was quickly surpassed, ending the evaluation round. The total evaluation amount reached $66,697 from 137 evaluations, indicating strong agreement among evaluators that the offering is fair.

So far, over $21,000 has been committed in the auction part of the funding round, with expectations for increased activity in the upcoming community round. Furthermore, funding started with a single bid of over 10K USD worth of DOT.

Several promising projects are lined up for fundraising on Polimec. Following is a brief round up on them.

Gotem is a decentralized Web3 platform for crowd investigations and security. It enables individuals and organizations to collaborate on investigations, ranging from crypto frauds and rug pulls to conducting background checks.

For real estate and RWA tokenization enthusiasts, Xcavate offers a decentralized, community-driven protocol designed to bring speed, accessibility, and transparency to the sector.

Another project coming soon is Hyperbridge, a hyper-scalable co-processor enabling cryptographically secure interoperability across blockchains. The team plans to hold their sale on Polimec, building on their successful crowdloan through which they have secured a parachain slot that is already processing blocks.

Lastly, Imaginus is a 2D game that offers both single and multiplayer modes, where players can collect in-game pets and treasures as NFTs. On the project roadmap, the team scheduled funding for Imaginus for Q2 of 2024, meaning this should happen anytime soon.

Polimec allows decentralized access for users to invest in projects from their early stages. Some of the valuations of recent projects fundraising have shown a significant difference compared to those in 2021 where projects like Moonbeam, Acala, and Unique, sold tokens with a $250 million fully diluted valuation (FDV). BitCounty went even further, nearly doubling the valuations of Moonbeam with a sale at a $450 million FDV.

These FDVs can be considered high when compared to current fundraises like that of Mandala Chain, which is offering its token sale at an FDV of $20 million–just 8% of that of Unique Network and a few others. That said, there have been projects associated with the Polkadot ecosystem, like Peaq Network that have had huge valuations.

Overall, many of the high valuations from 2021 left little room for growth, with some projects struggling to maintain their worth. However, you can make a case that the current landscape is much different. The lower valuations for some new projects on Polimec could suggest that community members are entering earlier in the project lifecycle, potentially providing more room for growth.

We are the VCs now!!!

News from the Finders Program Part 1

Written by yay.oi

• In their H1 2024 Community Report, the Polkadot Assurance League (Bounty 22) announced payouts of over 150K DOT to subsidize 14 Rust security audits for 11 different parachains. With plans to expand their program in H2, stay tuned for a fresh funding proposal.

• Fireblocks, an enterprise-grade platform for managing digital asset operations and building businesses, has joined the Peaqosystem. The integration will give Fireblocks users access to PEAQ and all DePIN tokens natively launched on Peaq.

• YOM, a Solana based decentralized cloud gaming compute DePIN, announces its expansion to the Peaq network.

• Acurast and Peaq have been named as founding members of the DePIN Association, which aims to expand and accelerate DePIN adoption through education and advocacy.

• Energy Web has partnered with Acurast to use their decentralized compute network to host their worker nodes.

• After achieving slightly over 33% of their target, Impactscope has accepted $100k for their fundraise on Polimec. Funding participants will receive their tokens, however, evaluator’s bonded PLMC will be slashed by 20%.

• Early pool and other Authtrail backers can now claim their Apillon NCTR tokens in accordance with the AUT pre-seed round deals. To compensate for delays, all eligible contributors will receive a 15% NCTR bonus.

• Apillon's NCTR token is now tradeable on the MEXC exchange.

• Mandala Chain’s Auction Round has commenced on Polimec. They are seeking $250k of funding, with a token floor price of 0.02c.

• KastorFinance will be utilizing Tanssi's appchain infrastructure to build their fractional real-estate investment platform.

• Astar announces integration of Chainlink’s CCIP, which will enable token transfers and cross-chain communications across numerous chains.

• Building with Move VM is now possible on Polkadot and Substrate blockchains thanks to a new pallet built by Eiger.

• Mimir multi-sig wallet is now live on Darwinia and Crab chains.

• PaperMoon has received a Web3 Foundation Decentralized Futures Grant to build a digital resource hub for Polkadot developers.

• The Web3 Foundation announces seven recipients of Wave 22 grants.

• You may have some extra DOT in your wallet. With the migration of on-chain identities to People Chain, identity deposits have been released.

News from the Finders Program Part 2

Written by Sanchez

• Hydration releases Degen Mode, which makes all assets (memecoins included) from Asset Hub registered on Hydration viewable without manually adding them.
• Pink is bringing the Pinkdrop game to Telegram by partnering with PlayNation, a Telegram-based gaming wallet with games and airdrops available.
• Nova Wallet has added support for MYTH tokens on Hydration, allowing for the management and swaps of MYTH tokens.
• Sovereign Nature Initiatives are issuing special DOTphin proof of attendance NFTs to attendees of EDCON 2024 in Tokyo from the 24th to the 30th of July.
• Evrloot's new updates introduce new game mechanics with loot drops now available in expeditions.
• Messari's Q2 2024 report on Moonbeam highlighted various metrics, including DeFi TVL, stablecoin market cap, XCM activity, active addresses, and revenue. The data reflected the poor market conditions of the quarter.
• The MYTH token from Mythical has been added to the Omnipool and is now tradable on Hydration. Quick swaps are now enabled through the Nova Wallet swap feature.
• The proposal requesting a 500k DOT refill of the marketing bounty (bounty 33) has not passed, with 91.5 million DOT voting against the refill.
• There is a proposal to close the AMI Bounty program (Bounty 46), citing the inactivity of the bounty after some insights on the payments made.
• Shawn Tabrizi envisions a more frugal approach for the Polkadot Ambassador program, focusing on rewarding ambassadors based on their performance. This plan includes having full-time ambassador managers on a monthly salary and ranked ambassadors who can advance in status, outlining unique requirements for advancing to the next rank.
• Shawn Tabrizicreated a proposal for a tip of $200 in DOT for creating a document outlining a new approach to the Polkadot Ambassador program.
• GavunWud, the team behind the WUD memecoin, submitted a proposal to make WUD sufficient on Hydration with a sufficient balance of 20,000 WUD. This is being done to allow the team to do more with the Flappywud game, with more news expected next week.
• On the 24th of July**,** the Polkadot Blockchain Academy (PBA) hosted Mandala chain co-founder Michael Bennallack and Mandala partnership manager Pak1manto discuss blockchain and its use cases that can make a difference in the world.
• Polkaworld hosted Mandala Chain's Michael Bennallack and Pak1man on the 25th of July to discuss how Mandala Chain plans to onboard the next 100m users in Web3.
• Aurora Makovac, the co-founder of Lastic, was on the Business Case for Polkadoton the 25th of July to discuss coretime sales on Lastic and describe her experience at PBA.
• On the 24th of July, Charu Sethi and Catnip Pirate from the Unique Network discussed the latest NFT challenges on the EasyA app.
• Moonbeam, on the 25th of July, held a side event in Brazil, for networking between crypto influencers and enthusiasts. The event featured cocktails and beer and a lively DJ.
• Peaq held an AMA on the 25th of July with Teneo Protocol, a data layer for DePIN & AI, to discuss their expansion plans.
• DeStore held an AMA with their partners, American Coin & Digital Currency Labs (ACDC Labs),to discuss the launch of their website, updates and alpha.

That is all for this week. If you enjoyed the newsletter, please share it. You can subscribe on Substack to receive an email when next week's edition is ready. And if you're participating in creator staking on Subsocial, you can interact to increase your rewards — perhaps a good two-for-one deal by providing feedback or comments.

Awesome cover art created by Dodow.