The initiative was put to a vote as part of Referendum 1710, symbolically titled 'Desire for Change', and received support from 81% of participants. This decision marks an important turning point in the economic model of the Polkadot ecosystem.
Gradual slowdown of issuance: a new approach to inflation
According to the official announcement from the Polkadot team, starting from March 14 - a date coinciding with International Pi Day - the rate of issuance of new DOT tokens will be reduced every two years. This mechanism is designed to gradually reduce inflationary pressure and, in the long run, create conditions for a market deficit.Without this change, the total volume of DOT could have reached 3.4 billion by now. Instead, the current supply is 1.61 billion tokens - a result of the previous model, where approximately 120 million DOT were added to circulation annually.
Weak demand and price pressure: why this matters
Despite active issuance, demand for DOT has remained moderate in recent years. This has led to persistent downward pressure on the asset's price, which has become one of the main reasons for initiating the reform. Limiting supply while maintaining or increasing interest in the ecosystem could act as a catalyst for restoring the market value of the token.The market reacts cautiously despite the significance of the decision
According to data from the CoinGecko platform, at the time of publication, DOT is trading at around $4.21, with a market capitalization of $7.03 billion. Although Referendum 1710 is considered one of the most important in the project's history, the market reaction has been tepid: the price only briefly spiked slightly above $4.6 last week, showing no sustainable growth.From boom to lull: Polkadot's journey since 2020
Polkadot was launched in May 2020 and quickly became one of the most discussed projects in the blockchain industry due to its unique parachain architecture, which provides scalability and cross-network interaction. The idea belongs to Gavin Wood - a former co-founder of Ethereum and the author of the Web3 concept.However, after the initial surge of interest, community attention gradually waned. The peak value of DOT occurred in November 2021, when the token reached $55. Today, its price is 92% lower than its all-time high, highlighting the need for structural changes in the project's economy.
Now Polkadot is betting on a deflationary model, hoping to regain investor trust and strengthen its position in the competitive multi-chain ecosystem.