Polkadot DAO has taken a major step in reshaping the tokenomics of its ecosystem after voting to cap the supply of its native token, DOT, at 2.1 billion. The decision comes through Referendum 1710, which passed with overwhelming support, 81% of participating voters, signaling broad community approval for greater scarcity and reduced emissions in the long term.
Previously, Polkadot operated under an unlimited issuance model that minted 120 million DOT annually without any supply cap. This inflationary system raised concerns among investors and community members about long-term dilution of value. By capping supply, Polkadot introduces a more predictable economic framework designed to strengthen the asset’s scarcity and potentially improve its attractiveness to institutional and retail investors alike.
According to projections shared by the Polkadot DAO, the difference in supply under the new model is significant. By 2040, DOT’s circulating supply is expected to reach approximately 1.91 billion under the capped model. In contrast, the old unlimited issuance structure would have pushed supply closer to 3.4 billion. This nearly 45% reduction in future supply growth underscores the scale of the reform and its potential impact on DOT’s long-term value.
The proposal also introduces a two-year inflationary schedule, giving the network time to adjust and transition smoothly from its prior system. The Polkadot OpenGov framework, launched in 2023, enabled the community-driven decision-making process, where token holders could directly submit proposals, vote, or delegate voting power. This vote highlights the strength of Polkadot’s decentralized governance and its ability to implement impactful changes through community consensus.
Despite the positive sentiment surrounding the long-term tokenomics, DOT’s short-term market reaction was mixed. The token fell 2.2% over the past 24 hours, trading at $4.32 at press time. However, DOT remains up 9.8% on the week, with a current market capitalization of $6.6 billion, according to The Block’s data. Market analysts suggest the initial dip may reflect profit-taking after the recent rally, while the longer-term impact of reduced supply could strengthen DOT’s price outlook.
The move places Polkadot in line with other leading blockchain networks that have leaned toward capped or deflationary supply mechanisms to enhance investor confidence. By addressing inflationary concerns and introducing a clear supply ceiling, Polkadot DAO is signaling a commitment to long-term sustainability and value preservation.
As the ecosystem continues to expand and onboard new projects, the reduced token issuance is expected to play a critical role in shaping market perception of DOT. If demand continues to grow alongside Polkadot’s infrastructure development, the new scarcity-driven model could position DOT as a stronger asset in the broader crypto market.
