Gavin Wood, the founder of Polkadot, has revealed a $777-million development fund ahead of the network’s parachain lease auctions.
It has been reported that Wood tweeted on Sunday that Polkadot’s treasury has allocated more than 18.9 million Polkadot (DOT) (worth around $777 million as of October 19) to a development fund that will be disbursed through community governance.
However, according to Polkadot’s Wiki, the treasury funds can be spent if approved by the council, which votes on proposals put forward to them. The Polkadot council currently consists of 13 members, but the council plans to expand to 24 seats at some stage in the future.
The report said that with many Polkadot governance votes seeing poor community participation in the past, the development fund may be intended to bolster DOT holders’ engagement with the governance process. According to Polkassembly, three governance proposals put forward this past week have seen total voter turnouts of zero, six, and seven votes.
Likewise, stakeholders wishing to put forward a proposal must reserve a deposit of at least 5% of the proposed spend, with the deposit being either slashed (a burn mechanism to deter validator misbehavior) if rejected, or returned if accepted.
With funds being placed at risk in the event of an unsuccessful vote, Polkadot’s slashing mechanism may be a factor impeding governance engagement on the network. The new development fund was also revealed just weeks before Polkadot’s highly anticipated parachain auctions, which are scheduled to begin in early November, suggesting the funds could be intended to kickstart development targeting Polkadot’s forthcoming parachain ecosystem.
Moreover, Polkadot’s parachain auctions will be used to realize Polkadot’s vision for a sharded ecosystem. The auctions will see projects building on Polkadot compete to secure one of the 100 parachain slots by bidding to lock up DOT. Parachains are Polkadot’s sharded side-chains that can host decentralized applications and protocols, offer specialized computation, and communicate with Polkadot’s proof-of-stake Relay Chain to finalize transactions.
It has been analyzed that Polkadot’s existing Relay Chain exclusively processes transfers, governance, and staking services for the Polkadot network, with the forthcoming parachains being tasked with providing advanced features such as smart contract functionality and cross-chain compatibility. As such, the new development fund may be intended to encourage developers to begin building on Polkadot in preparation for parachains going LIVE.
Many onlookers have singled out the Coinbase-backed Acala Network as a frontrunner to win the first parachain slot on Polkadot.
Thus, Karura Network, Acala’s deployment on Polkadot’s sister network, Kusama, won the first parachain auction on Kusama by a significant margin in June. Karura pulled support from more than 15,000 entities to win its slot with a bid of more than 500,000 Kusama (KSM) (worth around $184 million as of October 19).
Source: Cointelegraph