In a significant move, the Polkadot Decentralized Autonomous Organization (DAO) has approved Referendum 1710, establishing a hard cap on the total supply of DOT tokens at 2.1 billion. This decision marks a departure from the previous model, which allowed for the annual issuance of 120 million DOT tokens without any supply limit.
As of today, approximately 1.6 billion DOT tokens are in circulation. Under the new model, the rate of new DOT issuance will decrease every two years, leading to lower token emissions and increased scarcity in the market. Projections indicate that by 2040, the total supply will be around 1.91 billion DOT, compared to an estimated 3.4 billion under the former issuance model.
The Polkadot DAO, a community-led governance system, utilizes the OpenGov framework to enable referenda where token holders can submit proposals, cast votes, or delegate their voting power. Referendum 1710 was passed with 81% approval, reflecting strong community support for the supply cap initiative.
At the time of writing, DOT is trading at $4.25, experiencing a slight decrease of 0.03846% from the previous close. The intraday high reached $4.47, while the low was $4.25. Despite the recent dip, DOT has gained 8% over the past week and 11% in the last 30 days, though it remains 92% below its 2021 all-time high.
Trading volume over the past 24 hours stands at $235.3 million, representing a 51.5% decrease from the previous day, indicating a slowdown in market activity. Open interest has dropped by 2.35% to $605 million, while derivatives volume has decreased by 43% to $446.5 million. This suggests that, although overall interest in DOT futures remains high, traders are reducing speculative positions in response to recent volatility.
The implementation of a supply cap is expected to have long-term implications for DOT’s tokenomics, potentially enhancing its value proposition by introducing scarcity. Market participants will be closely monitoring how this change influences DOT’s price dynamics and overall market sentiment in the coming months.
