Polkadot (DOT) founder Gavin Wood unveiled a $ 777 million development fund ahead of the network’s parachain lease auctions.
Drink tweeted on October 17, the Polkadot treasury allocated over 18.9 million DOT (worth approximately $ 777 million at the time of writing) to a development fund to be disbursed through governance community.
Wood gave broad suggestions on how the funds could be spent, stating that capital will be mobilized to realize the community’s vision to “build, improve, educate” the Polkadot ecosystem, in addition to “all that Polkadot’s governance considers it useful.
According to Polkadot’s Wiki, Treasury funds can be spent if approved by the board, which votes on proposals submitted to them. Polkadot’s board currently consists of 13 members, but the board plans to expand to 24 seats at some point in the future.
With many votes on Polkadot governance seeing low community participation in the past, the development fund may be aimed at strengthening the engagement of DOT holders in the governance process. and seven votes respectively.
Stakeholders wishing to present a proposal must reserve a deposit of at least 5% of the proposed expenditure, with the deposit being either reduced (a scorch mechanism to deter the validator) if rejected, or returned if accepted. . With funds put at risk in the event of an unsuccessful vote, Polkadot’s cutting mechanism can be a factor hampering governance engagement on the network.
The new development fund was also revealed just weeks before the start of Polkadot’s much-anticipated parachain auction, which suggests that the funds could be intended to kick off development targeting Polkadot’s next parachain ecosystem.
Polkadot’s Parachain Auctions will be used to realize Polkadot’s vision for a fragmented ecosystem. Auctions will see Polkadot-backed projects compete for one of 100 parachain slots by bidding to lock DOT.
Parachains are Polkadot’s fragmented side chains that can host decentralized applications and protocols, offer specialized computations, and communicate with Polkadot’s proof-of-stake “relay chain” to complete transactions.
Polkadot’s existing relay chain exclusively deals with transfers, governance and staking services for Polkadot’s network, with upcoming parchains tasked with providing advanced features such as smart contract functionality and cross-chain compatibility.
As such, the new development fund may be intended to encourage developers to start relying on Polkadot for the commissioning of parachains.
Related: Polkadot eyes breakout to $ 75 after DOT price rally sets up classic bullish reversal
Many onlookers named the Coinbase-backed Acala network as a favorite to win the first parchain slot on Polkadot. Karura Network, Acala’s deployment on Polkadot Kusama’s sir network, won the first parachain auction on Kusama by a significant margin in June.
Karara has garnered the backing of over 15,000 entities to win her niche with an offer of over 500,000 KSM (valued at approximately $ 184 million at the time of writing).