Is Polkadot DOT on the Brink of Collapse Incompetent Governance and Discrimination Against Asia Will Funds be Depleted Within Two Years Is it the Next FTX

Coin World reported:
Recently, a series of negative news about the Polkadot (DOT) ecosystem has triggered widespread attention from the industry and investors. From high marketing expenses, lack of actual business highlights, to governance issues and accusations of racial discrimination, Polkadot seems to be facing a serious crisis. Industry insiders warn that Polkadot’s financial situation is worrying, with funds only able to last for 2 years at most, making it likely to become the next FTX.


It is reported that in the first half of 2024, Polkadot’s marketing and promotion expenses were close to 37 million US dollars, equivalent to 42.4% of Polkadot’s annual budget, accounting for the majority of its overall expenses (total expenses of 87 million US dollars, net loss of 108 million US dollars). This expenditure is mainly used for advertising, influencer endorsements, events, gatherings, and conference hosting, aimed at attracting new users, developers, and companies to join the Polkadot ecosystem.
However, unfortunately, these expensive marketing promotions have not brought significant growth to Polkadot’s business. Zombit’s analysis report pointed out that in the first half of 2024, Polkadot’s on-chain activity did not see a significant increase, with weak growth in active users, transaction volume, and other key metrics. The ecosystem also lacks notable applications and developments, which starkly contrasts with Polkadot’s high marketing spending of 37 million US dollars.


Some analysts pointed out that according to Polkadot’s own financial reports, as of June 30, 2024, the balance of the Treasury fund pool (similar to reserves) was only 960 million US dollars. Although Polkadot has certain inflation mechanisms to inject new funds into the Treasury, considering the recent high spending of Polkadot and potential continuous high spending, it is likely that the Treasury fund will be difficult to maintain for a long time.
At the current rate of expenditure, the Treasury can only last for a maximum of 24 months. In other words, Polkadot is likely to exhaust its main source of funds within 2 years, which will severely restrict the sustainable development of the network and face significant challenges.


Some supporters of Polkadot have tried to clarify this concern, arguing that Polkadot has a sustainable financial model and that the Treasury is not the only source of funding. However, in fact, Polkadot’s revenue model is not clear, and there is still great uncertainty about the sustainability of the Treasury.
This undoubtedly raises questions from the public: Does the Polkadot Foundation have issues with fund management, misusing fund resources for ineffective marketing promotions? For the long-term development of the Polkadot ecosystem, this is undoubtedly a significant hidden danger that cannot be ignored.


Even more worrying is that Polkadot’s governance mechanism is also under scrutiny. A developer named VictorJi pointed out that Polkadot’s governance is too centralized, lacks sufficient community participation, and lacks transparency and fairness in the decision-making process, and even has issues of discriminating against Asians.
Specifically, suggestions and opinions from Asian developers within Polkadot are often ignored or treated perfunctorily, while developers from Europe and the United States receive more attention and support. This differential treatment has led to dissatisfaction among many Asian developers.
This accusation undoubtedly undermines the credibility of Polkadot and directly affects its sustainable development. As a blockchain project aimed at a global audience, if Polkadot does indeed have issues of regional discrimination, it may be difficult to continue gaining the trust and support of a wide range of users.


These signs undoubtedly raise concerns in the market about Polkadot. Some analysts bluntly stated that Polkadot may become the next cryptocurrency scandal after FTX. High marketing costs, lack of actual results, controversial governance issues, and the imminent depletion of the fund pool are undoubtedly exacerbating Polkadot’s crisis, causing concerns that it may be following in the footsteps of FTX.
In response to external doubts, the Polkadot team has responded. They stated that the use of Treasury funds is decided by governance voting and not spent recklessly. At the same time, they claim that Polkadot operates in a “self-sufficient” model, able to continuously receive funding support through various channels and will not exhaust funds within 2 years. They also denied the allegations made by VictorJi, stating that Polkadot has never engaged in any racial discrimination.


However, these explanations have not fully convinced the public, and the numerous negative news have already sparked widespread concerns among users and investors. Polkadot seems to focus more on marketing and public posture, often criticizing other projects rather than addressing its internal flaws. Although Polkadot had a bright early outlook and technological advantages, without necessary changes, it may gradually be forgotten like EOS and Tezos.
Overall, high marketing costs, governance failures, racial discrimination, and the imminent depletion of funds have become a “time bomb” for Polkadot. Whether it will follow in the footsteps of FTX remains to be seen and may require observation for some time. After all, there are key differences between Polkadot and FTX.


FTX’s collapse was accelerated by its role as an exchange, where liquidity issues could quickly spiral out of control. Polkadot, as a blockchain platform, operates differently. Its collapse may be more gradual, driven by the loss of user and developer trust, rather than an immediate liquidity crisis.
The resolution of Polkadot’s crisis depends on its ability to transform. Addressing user experience issues, improving DEX liquidity, and enhancing governance are key steps. Unlike FTX, Polkadot has the opportunity to correct its course and leverage its technological advantages to regain community trust, avoiding the trap that led to FTX’s rapid collapse. The next few months will be crucial for Polkadot to adjust its strategy and maintain its growth.