Polkadot spends almost $400K on Token2049

Polkadot continues to spend aggressively on promotion. For its representation on the Token2049 event in Singapore, Polkadot spent more than $387K, with a very small effect on the DOT token price action. 

Marketing spending on Polkadot is still generous, despite previous discussions on financing the wrong type of popularization efforts. For its presence on the Token2049 event in Singapore, Polkadot’s treasury spent out a total of $387K, as calculated by brand ambassador Eric Holst. 

More than half of the funds were spend in sponsoring the event and branding special events and areas with the Polkadot logo. Polkadot also got the title of Platinum Sponsor for Token 2049. Polkadot also had a centrally placed prominent booth. 

This time around, Polkadot did not spend $70,000 on an airport billboard. The project is a highly specialized hub for Web3 and decentralized finance, which leaves the community puzzled on why it uses mainstream advertising tools. 

The recent vote on spending the marketing budget on the Token2049 event comes just months after Polkadot set aside another $1M for publicity activities. Polkadot received the most criticism for hiring Key Opinion Leaders (KOL), which did not generate enough impressions for the content they produced. 

The biggest problem facing the Polkadot community is that the DOT native token remains stuck in its stagnant trading range. Even after Token2049, DOT traded at $4.62, returning to the levels of 2022. Briefly, DOT went above $11 during the 2024 Q2 rally, but continued to slide since then. DOT is still a top 15 token and traders have high expectations for its performance. 

Polkadot still has enough reserves for aggressive marketing

Polkadot still has reserves to continue its spending spree for a while. The project’s treasury has $245M in stablecoins and DOT reserves. 

The treasury holds more DOT compared to stablecoins and distributes it as bounties. Influencers, ambassadors and other participants are still paid in DOT, and the project may sell some of the assets. DOT often feels the price pressure, sliding down despite the high-profile promotions. Some of the DOT is swapped through the Hydration DEX, with a dedicated liquidity pool. 

Polkadot also subsidizes developers and projects with several targeted bounties. Those include the Hydration Fellowship and the Collectives Fellowship. The Polkassembly treasury also helps with the creation of new projects, distributing its funds through regular votes. The Polkassembly reported more than $105M in its treasury, where even a relatively small DOT recovery helps growth. 

In the first half of 2024, Polkadot still brought criticism on itself, after spending $37M of its marketing bounty on influencers. Reports also appeared of Coinbase paying CoinMarketCap $500K for a single animated logo on its main page, even surpassing the recent Token2049 budget. 

However, overspending on marketing led the community to vote against refilling the Marketing Bounty in July. The proposal failed with 54% voting against and 46% in favor. The DOT deposited to the bounty usually reach influencers, again creating selling pressure for DOT. 

Even now, Polkadot is voting on substantial funding for several side projects, aiming at popularizing the network. The Polkadot Music Events Initiative set up a vote for $1.13M. Three more active votes are putting out smaller budgets for organic PR and marketing, staking rewards partnerships, and collective content creation for 52 weeks with Wag Media. 

Polkadot continues to host multiple votes demanding DOT subsidies. Until now, the project has not faced a governance attack, as not all proposals have been approved. The Polkadot ecosystem is also highly transparent about its spending. However, there are worries of over-marketing the project, while Polkadot itself hosts fewer than 5K daily active users. 

The platform still fulfilled most of its promises and hosts multiple apps. As a whole, Polkadot produces extremely low fees of under $1,000 per day. The disparity between the high marketing budget and the size of Polkadots’ projects further draws attention to the outsized spending on marketing and content. 

The Polkadot ecosystem has about $100M in value locked for its top liquid projects. Another 20% goes toward minor apps and features. As a layer-1, Polkadot has achieved only $20K a month in basic transaction revenues, while spending much more to reach users through social media influencers. Single influencers report bounties of $25K, more than a month’s fees on Polkadot, for relatively limited content. 

Cryptopolitan reporting by Hristina Vasileva