The Polkadot community has done just that approved the Optimistic Project Funding proposal to support projects that improve the blockchain network ecosystem.
The proposal received unanimous approval, backed by more than 55 million DOT tokens.
Optimistic project financing
Polkadot aims to attract top developers by providing continuous and dynamic financing for their projects. This proposal allows projects to apply for funding through a referendum, voted on by all token holders.
Eligible projects include parachains, decentralized applications and ecosystem portfolios. While there are no strict guidelines for the use of funds, community voices can consider projects’ spending plans.
DOT holders also have the option to vote against funding projects they consider undesirable or malicious.
Ben McMahon, the proposal’s creator and Ecosystem Lead at HydraDX, shared CryptoSlate that Polkadot has a powerful treasury that is not always used effectively. According to him, this feature allows token holders to direct some of DOT’s inflation directly to projects they believe will most benefit the ecosystem.
In a post on social media, McMahon continued explained:
“Once implemented, this feature will allow users to nominate whitelisted projects using their DOT. This mechanism will be funded by a steady stream of DOT drawn directly from inflation and distributed to projects based on the share of DOT that nominated them.”
McMahon noted that this funding mechanism is similar to Optimism RetroPGF round, which rewards contributors to the ecosystem for their past work. Since the model’s introduction in 2021, Optimism has received praise from key crypto figures, including Ethereum co-founder Vitalik Buterin, for supporting developers and contributors building public infrastructure without traditional business models.
Meanwhile, the proposal passage has drawn positive responses from the Polkadot community, with many pointing out the massive impact it would have on the ecosystem.
Giotto De Filippi, senior member at DED, said:
“The DOT protocol will reward your project on an ongoing basis by giving it a percentage of daily inflation depending on how much they think your project is beneficial to Polkadot; this is determined by the vote of the DOT holders, so it is completely decentralized and democratic.”
Disclaimer: CryptoSlate has received a grant from the Polkadot Foundation to produce content about the Polkadot ecosystem. While the Foundation supports our reporting, we maintain full editorial independence and control over the content we publish.