Polkadot sets 2.1 billion DOT cap to reshape tokenomics, but market slides 5%

Polkadot’s DOT token slid almost 5% up to now 24 hours, regardless of the community’s group approving a landmark governance proposal that reshapes its tokenomics.

On Sept. 14, the workforce confirmed through X that the group had handed the “Wish for Change” proposal, which sets a tough cap of 2.1 billion DOT.

The transfer ends Polkadot’s open-ended issuance mannequin, which generated roughly 120 million new tokens yearly.

Currently, round 1.6 billion tokens are in circulation, which means greater than three-quarters, or 76%, of the eventual provide has already been minted.

Polkadot stated it goals to stabilize its long-term financial design by introducing shortage and winding down inflation as a funding mechanism. The change highlights a broader effort to cut back dependence on perpetual issuance and push the ecosystem towards different income streams.

DOT’s new inflation schedule

The new framework introduces a stepped-down inflation schedule starting March 14, 2026. Under the revised mannequin, token issuance will taper over a two-year adjustment interval.

Polkadot estimates that about 1.91 billion DOT might be in circulation by 2040, which is much under the three.4 billion projected beneath the outdated system. The last cap is predicted to be reached across the yr 2160.

To handle this course of, the proposal outlines three schedules for lowering inflationary strain. One possibility instantly cuts emissions by greater than half earlier than easing off, whereas one other applies sharper early reductions adopted by a gradual decline by the subsequent century.

Polkadot’s ecosystem adjustments

The governance overhaul arrives as Polkadot works to strengthen its place towards rivals like Ethereum by initiatives comparable to Polkadot Capital Group, which seeks to bridge conventional finance.

It additionally coincides with the return of co-founder Gavin Wood as CEO of Parity Technologies, the blockchain community’s improvement arm.

Yet these strikes have failed to halt the token’s slide.

At press time, DOT trades at roughly $4.20, in accordance to CryptoSlate information, marking a recent 24-hour decline of almost 5%.

The drop compounds a broader downturn, with the asset shedding about 34% of its worth for the reason that begin of the yr.

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