DOT Alignment & Demand Drivers

@OliverTY

We need to differentiate between Polkadot the ecosystem and DOT the token. The post above does not discuss Polkadot alignment. Projects can build selfishly on Polkadot and they do. They collectively pay their proper fees of about 110k DOT per year for the usage of the platform.

What I discuss above is from the perspective of the DOT token and the DOT token economy. DOT interacts with Polkadot in three ways:

  1. The security of Polkadot is determined by the value of DOT
  2. Projects building on Polkadot that interoperate financially need a medium of exchange
  3. There is a psychological association of the “success” of the token with the success of the network

The security is of course of the most relevant factor for the platform, but the financial composability and psychological association is also important, because if Polkadot loses relevance here it will not be considered as a platform to build on.

If we want to maintain the security of the network, we have to consider the value proposition of DOT. I am not making a call to manipulate projects to use DOT exclusively, but I am making a call that we consider how DOT can be made useful for the economy and unfold value creating network effects, be useful as medium of exchange. and create a strong capital base in which projects like to build settle in.

I have proposed a non-interventionist mechanism here: Economic Growth Incentives