- Polkadot ends unlimited issuance, capping DOT supply at 2.1B.
- New inflation model projects 1.91B DOT supply by 2040.
- DOT price dips despite governance win for community-led policy.
Polkadot DAO has approved a significant change to DOT’s tokenomics by introducing a fixed supply cap of 2.1 billion tokens. The move ends the network’s unlimited issuance model, which previously minted 120 million DOT each year without restriction. Polkadot DAO announced that the majority of its voters passed referendum 1710 by 81%.
The new system has a two-year inflation schedule, which would gradually decelerate the increase in tokens, without the validation incentives being reduced. This is a radical change to the previous policy, which threatened the long-term issues of oversupply since it was issued every year.
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New Cap Versus Old Model
Polkadot outlined that under the revised system, supply would reach about 1.91 billion by 2040. In comparison, the former issuance model would have taken the supply to nearly 3.4 billion within the same period. The goal of the change is to work towards bringing the pressure of inflation and reinforcing the scarcity story surrounding DOT.
Meanwhile, the market’s reaction was divided, and DOT dropped 2.2% over the last day to $4.32. However, the token is almost 10% higher than the week before. With a market cap of $6.6 billion, DOT remains among the most significant assets in the crypto market, notwithstanding the fluctuations in the short term.
In addition to market impacts, the move shows how the governance system at Polkadot gives power to holders of tokens. Through its OpenGov platform, which was launched in 2023, community members can make a proposal, vote, or delegate the vote. This model helps to make key economic policies, such as controlling supply, be determined jointly.
Also, the supply ceiling brings Polkadot into line with several mainstream blockchains, which rely on fixed issuance models to enhance the perception of long-term value. The removal of unlimited token emission has strengthened the DAO’s conscious sustainability and community-based decision-making.
Conclusion
Polkadot DAO’s decision to cap DOT supply at 2.1 billion marks a defining moment for the project. Ending unlimited issuance sets the stage for a more sustainable and scarcity-driven future, giving token holders greater confidence in the network’s long-term outlook.
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