Since yesterday, the crypto community has been posting many memes on X regarding the Polkadot project and some of its questionable marketing choices.
According to the same Polkadot Foundation in a report on the Treasury, in 2024 about 5 million DOT have already been spent for marketing purposes.
What causes the most sensation is not the amount itself, but the way in which this money has been spent.
The supporters of the L1 blockchain are then worried about the solvency of the group, given that at this rate the available liquidity will run out in just 2 years.
Let’s see everything in detail below.
Summary
Polkadot reveals the spreadsheet of marketing expenses incurred in 2024: 5 million DOT used
A few days ago the team of Polkadot published the report on the financial situation of their Treasury, showing shocking details in the marketing field.
From the public spreadsheet, it emerged that in the first half of 2024 the project spent 4.94 million DOT; equivalent to 36.7 million dollars, in order to promote its cryptographic infrastructure.
Of this sum, the largest slice amounting to about 10 million dollars was used for sponsored content. Then follows 4.8 million dollars for advertising with influencers and 4.4 million dollars for events and conferences.
Also the components of digital ads, business development, media and physical ads cover a significant share of the funds used by Polkadot.
Below is the complete spreadsheet
It is not surprising the million-dollar amount allocated to marketing, considering that many projects spend much more in this regard.
What caused a stir was rather the way the promotional campaign was managed. In fact, just under 60% of the budget was allocated to advertising deals with sports associations and famous personalities.
The events have cost Polkadot quite a bit considering that between Polkadot Decoded China, Token2049 in Dubai and Sub0, several million dollars have been spent.
It also makes one smile the half a million dollars paid to CoinMarketCap to include the bright logo of Polkadot on its homepage.
Everything seems to suggest entirely superfluous costs for the cryptographic structure of the project, which has to face much more important challenges compared to the animation of the logo.
The commitments with the newspaper The Block, for which Polkadot spent 226,000 dollars, and a 6-month promotional campaign with various airports have also been heavily criticized.
Think that from the Treasury funds, 180,000 dollars have been committed to customize a private jet with its own brand.
Polkadot: the questionable marketing choices push the crypto community to publish a flood of memes
It is clear that these economic expenditures for marketing should lead to a return of image for Polkadot and attract new users.
It seems, however, that the new users have not bought more DOT than those spent on promotional campaigns, given that the token is at -22% since the beginning of the year.
The crypto community of Polkadot was astonished by how the project’s resources were allocated by the marketing managers, complaining a lot.
As a response to the blatantly inefficient choices, many joke memes mocking the project have been published.
Some influencers had fun publishing fake screenshots depicting the Polkadot account asking for a single sponsored content for 1 million dollars.
https://twitter.com/ThePaulOla/status/1808215515510235412
Others have simply invited the blockchain founders to review their staff, making reference to promotional choices incompatible with the web3 sector.
Some marketing techniques indeed seem to belong more to the traditional web2 industry than to the cryptographic one.
Other users have referred to their villa purchased precisely thanks to the alleged marketing allocation established by the agreements with Polkadot.
In all this, there are those who have taken the opposite side, claiming that this move was brilliant on the part of Polkadot.
Using Treasury funds in the most incorrect way has indeed created an engagement effect among the crypto community.
The fact that everyone at this moment is talking about the absurd marketing choices of the project creates much more visibility than what could have been purchased with the marketing itself.
Many influencers, sometimes with many followers, have indeed reported this news, bringing great attention to Polkadot.
As the famous Oscar Wilde said in the guise of his character Dorian Grey:
“It doesn’t matter if they talk well or badly about it, the important thing is that they talk about it”.
In the meantime, we at the Cryptonomist team are still waiting for a commercial offer from Polkadot.
A problem for the treasury of Polkadot
The crazy expenses for Polkadot’s marketing could be a problem for the solvency of the project’s Treasury in the immediate future.
As reported in the Balance Sheet, the project still has a total of assets available amounting to 38.2 million DOT equivalent to a value of 244.9 million dollars.
Of these, only a small part is held in stable assets like USDC and USDT, while the rest is calculated directly in the gas token of the ecosystem.
The “liabilities”, that is the debts of Polkadot are negligible as they amount to only 250,000 dollars. At first glance, it seems like a financial situation that is at least stable.
However, if we think about the amount of money committed in these first 6 months of 2024, the projections for the future years are frightening.
In fact, at this spending rate, the Treasury of PolkaDot would run out of liquidity within 2 years. By mid-2026, the blockchain of Gary Wood, former co-founder of Ethereum, could be left without resources.
If the money used for marketing does not produce value or create the conditions for new revenue, the project risks dying.
In all this, it should be noted that if DOT returned to its all-time highs, the project would have at least another 10 years to develop its infrastructure.
For the moment, from the document “Income Statement” published, it appears that in 2024, Polkadot has recorded more expenses than earnings.
It also weighs the fact that the most massive revenues have been obtained with the inflation of the DOT token, which is minted periodically precisely to make up for the expensive structure.
