Polkadot unveils $770M development fund ahead of parachain auctions
Polkadot has unveiled a $777-million development fund ahead of the network’s parachain lease auctions.
Gavin Wood, the founder of the Polkadot, tweeted that the Polkadot treasury has allocated more than 18.9 million DOT (approximately $775 million) to a development fund that will be disbursed through community governance.
The @Polkadot treasury currently has 18,936,300 DOT (DOT, not USD - do the math) in it ready to spend on *your* ideas for building, improving, educating and indeed, anything else that the Polkadot governance believes valuable.— Gavin Wood (@gavofyork) October 17, 2021
Wood gave broad suggestions as to how the funds might be spent, stating the capital will be mobilized to realize the community’s vision for “building, improving, educating” Polkadot’s ecosystem, in addition to anything else that the Polkadot governance believes valuable.
The treasury funds can be spent only if approved by the council, which votes on proposals put forward to them. The Polkadot council currently consists of 13 members, however, the council plans to expand to 24 seats at some stage in the future.
With many Polkadot governance votes seeing poor community participation in the past, the development fund may be intended to bolster DOT holders’ engagement with the governance process. According to Polkassembly, three governance proposals put forward this past week have seen total voter turnouts of zero, six and seven votes, respectively.
Governance users wishing to put forward a proposal must reserve a deposit of at least 5% of the proposed spend, with the deposit being either slashed if the proposal is rejected, or returned if accepted. With funds being placed at risk in the event of an unsuccessful vote, Polkadot’s slashing mechanism may be a factor impeding governance engagement on the network.
The new development fund was revealed just weeks before Polkadot’s highly anticipated parachain auctions, which are scheduled to begin in early November, suggesting the funds could be intended to kickstart development targeting Polkadot’s forthcoming parachain ecosystem. The parachain auctions will be used to realize Polkadot’s vision for a sharded ecosystem. The auctions will see projects building on the blockchain compete to secure one of the 100 parachain slots by bidding to lock up DOT.
Parachains are Polkadot’s sharded side-chains that can host decentralized applications and protocols, offer specialized computation, and communicate with Polkadot’s proof-of-stake Relay Chain to finalize transactions.