As a long-term crypto investor with experience in following various blockchain projects closely, I find Polkadot’s recent marketing expense disclosure concerning. The $37 million expenditure on outreach activities raises questions about the project’s priorities and transparency.
The transparency of Polkadot‘s blockchain project has come under question following their disclosure of a $37 million expenditure on marketing costs, leading to intense examination and critique from their community.
Gavin Wood, one of the co-founders of Ethereum, established Polkadot as a network featuring sharded multi-chains. However, recent revelations about Polkadot’s $37 million marketing budget have sparked criticism and intense examination from its community.
In the H1 2024 financial report of Polkadot, approximately $40 million were allocated for activities aimed at bringing in new users, developers, and businesses to the ecosystem, which they refer to as “outreach expenditures.”
As a analyst, I would describe this span of activities as encompassing various areas including advertising and media, both online and offline community engagement and event planning, along with organizing large-scale conferences and business expansion.
Polkadot
As an analyst, I’d rephrase it as follows: The marketing expenditure accounted for over $30 million in total, with approximately $20 million being channeled towards advertising and around $10 million worth of DOT tokens dedicated to sponsorships. These sponsorship investments encompassed deals in sports, collaborations with race car drivers, and a partnership with an e-sports tournament organizer. For context, Polkadot had allocated $23 million for development initiatives during the first half of the year.
The marketing costs sparked strong criticism among the blockchain community, who leveled charges of centralization and unnecessary financial campaigns against it. Victor Ji, a co-founder of Manta Network, voiced his displeasure in a Reddit post, labeling Polkadot a “toxic ecosystem” that fails to deliver value for web3 applications. He also accused it of bias and neglect towards projects developed on its network.
As an analyst, I’ve observed an intriguing disparity during the Polkadot Academy event held in Hong Kong last February. Despite being located in Asia and boasting a significant budget exceeding one million dollars, less than a quarter of the attendees were Asian participants. It was at this very event where I had the pleasure of meeting Gavin Wood for the first time. The underrepresentation of the local population in such an expensive gathering is certainly worth further investigation.
— victorji.eth ✨ (@victorJi15) July 2, 2024
Another core developer at Polkadot, using the alias @seunlanlege, also criticized the project’s approach, saying it’s “insane to me how much money the Polkadot treasury is wasting on misplaced marketing,” and drawing parallels between Polkadot and the bankrupt FTX crypto exchange.
According to the report, Polkadot’s treasury will last approximately two more years at the current spending rate, taking into account the volatile nature of cryptocurrency funds. However, it is important to note that Gavin Wood, the founder, has yet to address this issue in a public forum.
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2024-07-02 14:40