Polkadot announces a $ 770 million development fund ahead of the Parachain auctions
Polkadot (DOT) founder Gavin Wood unveiled a $ 777 million development fund ahead of the network’s Parachain rental auctions.
Wood tweeted 17 that the Polkadot Treasury has allocated over DOT 18.9 million (worth approximately $ 777 million at press time) to a development fund that will be paid out through the local government.
Wood made sweeping suggestions as to how the funds should be used and how much capital would be raised to realize the community’s vision of “building, improving, educating” and “everything else” the Polkadot ecosystem Polkadot management considers valuable.
According to the Polkadot Wiki, state coffers can be spent with the consent of the council, which votes on the proposals put before them. The Polkadot Council currently consists of 13 members, but the council plans to expand to 24 seats in the future.
Since many Polkadot governance votes have shown low community engagement in the past, the Development Fund could aim to increase DOT holders’ participation in the governance process from 0.6. and seven votes.
Stakeholders wishing to submit a proposal are required to pay a deposit in advance of at least 5% of the proposed expenditure, with the deposit reduced (a reviewer misconduct detection mechanism) if rejected or refunded if accepted will. With funds at risk in the event of a failed vote, Polkadot’s severance payment mechanism could discourage governance from participating in the network.
The new development fund was also announced just weeks before the highly anticipated Polkadot parachain auctions start in early November, suggesting the fund may begin developing Polkadot’s upcoming parachain ecosystem.
Polkadot’s Parachain Auctions are used to bring Polkadot’s vision of a discrete ecosystem to life. At the auctions, projects based on Polkadot compete for one of 100 parachain positions by bidding to lock the DOT.
Parachains are Polkadot’s forked side chains that host decentralized applications and protocols, provide specialized computations, and communicate with Polkadot’s “forward chain” proof-of-stake to complete transactions.
Polkadot’s current relay chain only handles transfer, administration and staking services for the Polkadot network, with future parchains being entrusted with the provision of advanced functions such as smart contract functionality and cross-chain compatibility.
The new development fund could therefore serve as an incentive for developers to begin building on Polkadot in preparation for the Parachains going live.
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Many viewers chose the Coinbase-supported Acala Network as a pioneer to win the first Parchain spot on Polkadot. Karura Network, Acala’s implementation in Polkadot’s Kusama network, won the first Parachain auction on Kusama by a clear margin in June.
Karara sought help from over 15,000 organizations to secure his spot with a bid of over 500,000 KSM (valued at approximately $ 184 million at press time).