Polkadot’s ecosystem remains robust despite recent market downturns that briefly pushed DOT’s value to a seven-month low.

Polkadot ecosystem thriving

Data from DotLake shows a 33% month-on-month increase in transactions within Polkadot’s ecosystem, rising to 16 million in June from 12 million in May.

The growth was primarily driven by One Frequency, a Layer 1 blockchain enabling decentralized social apps, which saw a 3 million transaction increase to reach 5.4 million.

Additionally, Mythos Chain, a gaming network associated with developer Mythical Games, processed about 800,000 transactions during the reporting period.

Meanwhile, the number of unique addresses with non-zero balances on Polkadot rose slightly to over 7 million, up from 6.96 million in May and 6.8 million in April. DotLake commented:

“Number of Unique Accounts was stable at 7 million with Mythos’ strong entrance bringing in 800,000 new accounts, and from what we hear of what’s to come, that’s just the tip of the iceberg.”

Polkadot’s open governance platform, OpenGov, saw a 66% month-on-month increase in proposals, reaching 151. The platform allows DOT token holders to directly influence the network’s operations through different proposals focusing on marketing, business development, and other network development.

Furthermore, DotLake reported that Polkadot’s treasury assets comprise 26 million DOT, $3.9 million USDC, and 3.8 million USDT, totaling $167 million.

Over the past week, concerns arose when reports suggested that the treasury only had a “two-year runway.” However, Polkadot stakeholders debunked this news, assuring that the treasury could never run out of funds as it was continually replenished.

DOT price briefly falls under $5

Despite Polkadot’s rising metrics, DOT’s price has struggled considerably amid the broader market trend.

During the past day, Bitcoin, the bellwether digital asset, saw its price crash following heavy selling activity, triggering the fifth biggest realized loss since FTX collapsed in 2022.

This event impacted other top assets, such as DOT, which fell to a seven-month low of $4.98 due to the bearish market situation. However, it has slightly recovered to $5.79 as of press time.

Meanwhile, market observers noted that Whales are taking advantage of the price drop to scoop tokens for staking. On-chain data shows that a whale purchased 2.6 million DOT tokens, valued at $15 million, via the Binance exchange and directly sent them to the network’s staking address.

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Web3 Foundation and Parity Technologies, key players in the Polkadot ecosystem, have disclosed their financial independence from the network’s on-chain treasury.

The CEOs of the two companies revealed their “significant financial runway” after recent reports raised concerns about the blockchain’s financial health.

Parity Technologies is the blockchain infrastructure behind Polkadot, and the Web3 Foundation supports the network’s growth through funding and research.

Financial independence

Fabian Gompf, CEO of Web3 Foundation, clarified that the foundation has over five years of financial runway without selling DOT tokens.

Gompf further dismissed the concerns about the treasury as misleading, noting that “the treasury has continuous inflows [and is] never going to run out of funds.”

However, Gompf suggested that the treasury should focus on initiatives not covered by the foundation. He criticized recent spending on low-return activities and urged the community to vote for change.

Similarly, Björn Wagner, CEO of Parity Technologies, supported Gompf’s views. He noted that both organizations have significant financial independence from the on-chain treasury, which receives ongoing inflows.

While Wagner agreed with concerns about the recent spending, he highlighted Polkadot Governance as a leading and evolving DAO that has “plenty of opportunity for those seeking to be part of building this exciting future.”

Industry recognition

Meanwhile, Polkadot’s treasury report has garnered significant praise for its transparency within the crypto community.

Mikko Ohtamaa, CEO of Trading Strategy, commended the network for its unprecedented transparency and accountability in the blockchain industry. He said:

“Public blockchains and foundations should be transparent, as they are morally responsible for token holders (even if not legally). Polkadot led the way here. Being transparent exposes past misdeeds, and you can redeem your sins. There can be a change of a direction, turning a new page.”

Several community members have advised other crypto projects to follow Polkadot’s lead and release their treasury reports. According to them, some of these projects might be spending more on ineffective activities without disclosing their financial status to their communities.

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The Polkadot Treasury holds assets equivalent to 38 million DOT, worth approximately $245 million. Head Ambassador Tommi Enenkel, popularly known as Alice and Bob, shared a new report providing the latest update on the network’s treasury.

This balance equates to about two years of the runway at its current spending rate. The report stated:

“At the current rate of spending, the Treasury has about two years of runway left, although the volatile nature of crypto-denominated treasuries makes it hard to predict with confidence.”

Polkadot’s first six months of spending

During the first six months of this year, Polkadot invested heavily in its ecosystem, spending 11 million DOT, valued at around $87 million, across various projects.

According to the report, the network invested about $37 million in Outreach activities such as advertisements, sponsorships, and events. The network signed sponsorship deals with race car driver Conor Daly and also pushed several marketing activities designed to bolster the network’s adoption by the broader global community.

Polkadot also spent $23 million developing its network features and upgrades, including SDK, Data Services and Indexing, Governance, and Subwallets.

Moreover, the network invested $15 million in liquidity incentives and $5.5 million in Talent and Education. Additionally, it spent $3.8 million to maintain the network and core ecosystem components, and another $2.1 million went towards Research.

Revenue decline

The report highlighted a decline in Polkadot’s revenue. During the first six months of the year, the network’s total earnings dropped to 171,696 DOT from 414,291 DOT, recorded in the second half of 2023.

Enenkel attributed this decline to the significant drop in network fees, which fell from 313,443 DOT last year to 39,444 DOT in the 2024 first half:

“We see that direct revenue from fees is still marginal. Polkadot made 300k DOT from fees in 2023-H2 from a short-lived inscriptions campaign. Fees under regular conditions are pretty stable with about 20k DOT per quarter. Other sources of revenue are typically transfers from accounts that return funds that they received and pay them back for various reasons.”

Two researchers at Web3 Foundation, the organization behind Polkadot, are requesting comments on a proposal to reduce the unbonding time for staked DOT tokens.

Alistair Stewart, the head of research at the Web3 Foundation, and Jonas Gehrlein submitted the proposal to the Polkadot Fellowship committee on June 19.

The proposal

The proposal introduces a flexible unbonding mechanism for Polkadot’s native DOT token and its canary network, Kusama’s KSM token, while enhancing user experience and maintaining network security.

The key aspect of the proposal is to shorten the minimum unbonding period from 28 days to 2 days. According to the proposal’s GitHub document:

“New requests are executed with a minimum of 2 days, when the queue is comparatively empty, to the conventional 28 days, if the sum of requests (in terms of stake) exceed some threshold.”

The researchers further explained that the unbonding durations will scale according to the number of requests in the queue but will not exceed the current 28-day maximum.

If approved, the proposal will expedite the unbonding process while maintaining Polkadot’s ability to slash tokens backing malicious validators. This means tokens will not be unbonded immediately, but the process will be significantly faster.

Meanwhile, the proposal focuses solely on staking locks, leaving other locks, like governance locks, unchanged. The researchers also suggested piloting the model on Kusama before implementing it on Polkadot.

Community Concerns

Lurpis Wang, cofounder of the Polkadot-based Liquid Staking protocol Bifrost, expressed concerns about potential centralization risks posed by the proposal. He argued that reducing the unbonding time would not address the centralization issues linked with the liquid staking protocol.

Similarly, Gregus Jakub, the cofounder of Hydration, echoed concerns about the possible centralization risks attached to the new proposal, stating:

“Liquid staking didn’t proliferate on Polkadot more than anywhere else, actually its dramatically lower than on other networks. I would argue that current set is centralized already a lot but w/o any involvement of LST providers, P2P ~ 10% of stake, then Jaco, Zug Capital, maybe some other and we might be easy around 33% of PoS security threshold.”

In response, Gehrlein emphasized that the proposal aims to improve the user experience without undermining liquid staking providers. He stated:

“This proposal is not designed to undermine liquid staking providers but rather to improve UX for users that choose to stake directly on the Relay Chain anyway.”

Polkadot co-founder Rob Habermeier has proposed Plaza, a new system chain designed to unify parachain functionalities and enhance network scalability.

According to Habermeier, the current distribution of functionalities across multiple chains creates challenges for users and developers, leading to fragmentation and scalability limitations. He is advocating for a strategic focus on usability by building a synchronous system with scaling features.

Plaza

Plaza will integrate various parachain features into a single chain, benefiting users, developers, liquidity providers, and decentralized applications (dApps). The proposed solution would include several features, including asset issuance, smart contracts, staking, bridging pallets, and near-zero fees.

The chain will evolve from the existing AssetHub, which already supports asset wallets, bridging, and tooling integrations.

With Polkadot’s upcoming Elastic Scaling, Habermeier believes consolidating functionalities into a single chain will be advantageous. He stated that if approved, Plaza would streamline interactions across the Polkadot network, allowing developers to concentrate on scalability.

Habermeier wrote:

“We should work together as an ecosystem to bring a batteries-included single chain up to its point of bursting and only then relieve the pressure by spinning out apps, users, and system functionality. Polkadot has the cores to support all of this to the level of scale the world needs. The city needs to grow outwards from the center, and that center should be the Plaza.”

He also mentioned that Plaza might incorporate Polkadot’s identity and governance functionality in the future.

Habermeier acknowledged that while the new chain might temporarily impact other chains, it would ultimately drive further expansion of the Polkadot network. He said:

“My vision here is that this will be the New York City, Dubai, London, or Shenzhen of the Polkadot continent, the first megacity of many and a precursor to greater expansion. We can implement this plan eagerly, knowing that when the Plaza is saturated Polkadot (or JAM) has the raw validated compute power needed to handle that expansion.”

The Web3 Foundation has launched a prize pool of 10 million DOT tokens, equivalent to approximately $65 million, to support the implementation of the highly anticipated Join-Accumulate Machine (JAM) upgrade to the Polkadot’s ecosystem.

On May 27, Polkadot’s founder, Gavin Wood, revealed that the project’s community had ratified the proposed upgrade with a near-unanimous governance vote.

JAM Implementers’ Prize

The Foundation said its initiative aims to foster innovation and enhance the Polkadot ecosystem through diverse implementations of the JAM protocol, thereby increasing the network resilience.

The prize encourages the creation of JAM implementations in various programming languages, including OCaml, Go, and Zig.

To qualify, participants must meet specific milestones such as importing and producing blocks, achieving performance standards on Kusama and Polkadot, and passing security audits.

The initiative is designed to ensure the development of a decentralized network capable of handling various computational tasks.

Web3 Foundation said:

“JAM is an evolutionary, minimalist blockchain protocol designed to enhance data management and interoperability within the network. It will ensure that Polkadot continues to provide the leading standard when it comes to the security, flexibility, and scalability of blockspace.”

Furthermore, the upgrade introduces revolutionary scalability to the consensus layer, previously achievable only through rollups. This innovation removes the need for developers to choose between appchains and smart contracts.

The foundation said that JAM provides a versatile environment for ensuring Layer 2 (L2) scalability without relying on roll-up solutions and meeting the diverse needs of any application. It added that the strong community support for JAM indicates a readiness to embrace decentralized innovation while maintaining high standards.

Although the timeline for the upgrade is currently unknown, the implementation will proceed through five steps, including importation, authoring, speed checks, and security audits.

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Polkadot Treasury has allocated 2 million DOT, valued at $14.4 million, to enhance the liquidity of the DeFi project Hydration, according to a June 10 statement shared with CryptoSlate.

The project stated that the funds will boost the liquidity and efficiency of its single-sided liquidity provisioning platform, Omnipool.

This latest funding aligns with Polkadot’s current efforts to improve and expand the network’s adoption worldwide. Over the past weeks, the blockchain’s Web 3 Foundation has funded several projects, including PolkaPort East and Accelerate Polkadot.

Two-phase execution

This allocation will be executed in two phases. The first phase will disburse 1 million DOT to attract new liquidity to the Polkadot ecosystem. This includes rewards for liquidity providers (LPs) with an annual percentage yield (APY) exceeding 200%.

Hydration’s Omnipool’s single-sided LP design will facilitate this reward system. Users can earn rewards by depositing single assets or joining an incentive farm with stablecoins, DOT, and Bitcoin.

The remaining 1 million DOT will support the Hydration Omnipool, enhancing the native liquidity layer for the Polkadot 2.0 ecosystem. This is in addition to the 690,000 DOT already deposited into the Hydration Omnipool.

This funding aims to advance liquidity management on the Polkadot network, setting a new standard in blockchain technology. The Polkadot Protocol and OpenGov will administer and manage the funds.

Jakub Gregus, co-founder of Hydration, described the allocation as a pivotal moment for the project. He emphasized that this liquidity injection is crucial for the health of the Polkadot ecosystem. He stated:

“The Hydration Omnipool is designed to provide unparalleled efficiency and accessibility in trading crypto-assets, and this support from the Polkadot treasury is a testament to the potential impact of our forward-looking approach.”

Notably, this funding arrived less than a week after the project was renamed from HydraDX. According to its website, the total value of assets locked on the platform is $28 million, and it has a trading volume of $50 million in the last 30 days.

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The Web3 Foundation, the organization behind Polkadot, has awarded a Decentralized Futures (DF) grant to Accelerate Polkadot, which aims to boost developer productivity within the Polkadot ecosystem.

The firm stated:

“This groundbreaking initiative is dedicated to providing developers with the tools and knowledge they need to succeed in the Polkadot ecosystem through comprehensive, goal-oriented guides.”

This funding comes shortly after a similar grant was awarded to PolkaPort East to promote Polkadot’s Asian ecosystem growth.

Accelerate Polkadot

Accelerate Polkadot is a strategic initiative designed to lower entry barriers for developers on the Polkadot platform.

This program offers detailed, code-centric guides demonstrating practical applications and real-world use cases, making it easier for developers to launch innovative projects within the Polkadot ecosystem.

These resources are designed to be both accessible and engaging, enabling developers to start building quickly. The Web3 Foundation stated:

“All content produced is open-source, promoting transparency and community involvement. Developers are encouraged to contribute and provide feedback, fostering a collaborative environment.”

The first content package proposed focuses on creating a team management and rewards system for the game Cores & Conquests.

In this game, players can form guilds that others can petition to join. Guild members participate in governance through voting, managing aspects such as member admission and expulsion, choosing adventures, and distributing loot. This project will gamify the development of a decentralized autonomous organization (DAO).

Accelerate Polkadot said this project will showcase much of the Polkadot SDK’s core functionality and introduce developers to crucial concepts like decentralized decision-making, Sybil resistance, staking, and slashing, as well as various voting systems (including quorum voting, permissioned relative majority, quadratic voting, conviction voting, holographic consensus, and liquid democracy) in a familiar context.

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Polkadot-backed IndyCar racer Conor Daly achieved a top 10 finish at the prestigious Indianapolis 500.

Reports indicated that Daly led for 22 laps in the race but couldn’t maintain his lead due to his car’s speed limitations. Despite this, he managed a commendable top-10 finish, moving up an impressive 19 spots from his 29th-place starting position.

Reflecting on his performance, Daly noted that starting from the back impacted his ability to compete with the frontrunners. He reportedly said:

“We hadn’t run with (the frontrunners) the entire month, not even in practice because we were starting so far back. We usually were running with the other guys, so we weren’t geared long enough for when we had to trim out, so we trimmed out on the limiter in sixth (gear) when I tried to pass Scott (McLaughlin) a couple times. So that just hurt us a little bit, just kind of lacking just a little bit of speed, but the car was good.”

Nevertheless, Daly conceded that a top-10 finish was “a huge accomplishment” while flaunting the “biggest mover” trophy he got.

Polkadot’s official social media handle also praised the milestone, noting that the blockchain network was “well represented in the biggest single-day sporting event and motorsports race in the world.”

Daly was appointed Polkadot’s brand ambassador for the Indianapolis 500 race roughly a month ago — marking the first major athlete sponsorship through a blockchain-based community, receiving a 95.8% approval rating from the community.

The sponsorship aims to boost publicity for the Polkadot network and is the beginning of a one-year collaboration involving community events and digital campaigns to promote Polkadot’s technology.

Following Daly’s successful sponsorship, the Polkadot community has been exploring more sports-related partnerships, including a $8.8 million deal with Lionel Messi’s Inter Miami football club.