Polkadot Treasury Revenue Model Under Biennial Halving Issuance

Governance
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Polkadot Treasury Revenue Model Under Biennial Halving Issuance

Model Details

  • 2025 issuance (baseline): 120,000,000 DOT

  • Treasury allocation: 15% → 2025 Treasury income = 120,000,000 × 15% = 18,000,000 DOT

  • First halving: 2026, followed by a halving every two years.

Thus, the issuance sequence for the first few years is:
2025: 120M → 2026–27: 60M → 2028–29: 30M → 2030–31: 15M → and so on.

Annual Treasury income = annual issuance × 15%.

Treasury Income Projection (2025–2060)

Year Income (DOT) Year Income (DOT)
2025 18,000,000 2043 35,156
2026 9,000,000 2044 17,578
2027 9,000,000 2045 17,578
2028 4,500,000 2046 8,789
2029 4,500,000 2047 8,789
2030 2,250,000 2048 4,395
2031 2,250,000 2049 4,395
2032 1,125,000 2050 2,197
2033 1,125,000 2051 2,197
2034 562,500 2052 1,099
2035 562,500 2053 1,099
2036 281,250 2054 549
2037 281,250 2055 549
2038 140,625 2056 275
2039 140,625 2057 275
2040 70,312 2058 137
2041 70,312 2059 137
2042 35,156 2060 69

Observations

  • After 2034, annual Treasury income falls below 1 million DOT.

  • After 2039, it drops below 0.1 million DOT, rendering the Treasury functionally unsustainable without external funding sources.

Discussion: Treasury Sustainability

Given this model, it may be prudent to introduce an annual spending cap to preserve long-term sustainability.
For example, setting a hard cap of 2 million DOT per year would:

  • Extend the Treasury’s operational lifespan to roughly 50 years

  • Ensure that only essential, high-impact projects receive funding

  • Prevent rapid depletion of reserves as issuance declines

What do you all think about implementing such a cap?

1 Like
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Hi @dandan
agree. this is a very important topic, which needs to be discussed. I just had a question on how you estimated the treasury income?

3

hi @milus I update Model Details.

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The Hard Pressure issuance schedule agreed to by Ref. 1710 is not a biannual halving but rather 13.14% of remaining issuance recalculated every 2 years.

You can see this chartat line 237 for a more accurate depiction of treasury income (if it remains at 15%).

Slightly more severe for the first few steps but significantly more mellow after 2030!