The Current Status and Future Development Strategy Report of Polkadot

Introduction

Polkadot has made significant progress recently, successfully achieving two important milestones: OpenGov and XCM V3. However, despite the technological breakthroughs, Polkadot still faces some challenges, such as DOT price fluctuations and a decline in user activity. This report will provide a comprehensive analysis of Polkadot's current situation and propose strategic recommendations for future development.

The Current Status of Polkadot

1. Technical Update Status

Polkadot achieved two significant technical updates in the first half of 2023:

• OpenGov: A new governance model that achieves decentralization through community voting.
• XCM V3: The latest version of the cross-consensus message format, supporting features such as external network bridging.

Polkadot 1.0 has been fully delivered and is about to enter the 2.0 development phase. Polkadot 2.0 proposes several new concepts and technologies, including:

• Accord( Agreement): A voluntary treaty across multiple chains
• SPREE Technology: Ensures secure transmission of information and value between parallel chains
• Project CAPI: Promoting the development of DApps based on Polkadot

2. On-chain situation

According to Messari's report, the on-chain situation of Polkadot in the second quarter of 2023 is as follows:

• Development activities: Developer engagement continues to show an upward trend, with a relatively stable number of core developers.
• User Activity: Daily active accounts decreased from 6,290 to 5,810
• Income: Decreased from $120,000 to $81,000
• TVL: Decreased from the peak of $236 million in April to $147 million at the end of June.
• Staking Rate: Approximately 46%, below the ideal staking rate
• Staking return rate: approximately 9%

3. Developer Information

According to Electric Capital data, as of September 2023:

• Polkadot has 645 full-time developers, ranking second.
• The total number of developers is 1923, rising from third place to second place.
• Full-time developers account for approximately 33.54%

This indicates that the developer community of Polkadot is continuously expanding.

4. Ecological Situation

The Polkadot ecosystem is rapidly developing:

• The number of ecological applications has reached 580, covering multiple fields such as DeFi, infrastructure, and NFTs.
• The launch of XCM V3 has attracted widespread attention, offering advanced programmability and other features.
• The TVL of projects like Moonbeam remains at a high level.
• Multiple projects such as Mythical Games, Kilt, etc. have made significant progress.

5. Market Capitalization

As of October 11, 2023:

• Polkadot has a market capitalization of approximately $3.375 billion, ranking 14th.
• The DOT price has fallen by 31.87% in the past few months.
• Underperformed compared to projects like Cosmos, Optimism, and Arbitrum.

6. Social Media Situation

Official media of Polkadot include:

• Official website, Twitter, Reddit, YouTube and other channels
• Polkadot forum, GitHub, knowledge base and other platforms

Overall, Polkadot's official social media is quite rich, providing users with various ways to participate and communicate.

7. Treasury Governance Situation

OpenGov has advantages in improving governance efficiency, but also faces some challenges:

• Uneven voter turnout: There are significant differences in voter turnout for referendums across different tracks.
• Treasury balance decreases: expenditure rate significantly increases, which may lead to depletion of funds.
• Low approval rate: The proportion of approval and abstention votes to the total token issuance is low.

Issues Facing Polkadot

1. Economic model issues

• The inflation rate is relatively high, currently around 7.38%.
• The use cases for DOT tokens are relatively few.
• Users have concerns about the value of tokens.

2. Operational Issues

• On-chain data performs poorly, user activity is low.
• The interaction level on social media is not high
• Lack of a comprehensive data platform to showcase the Polkadot ecosystem

3. User Threshold Issues

• The operation difficulty is relatively high and requires certain technical knowledge.
• The ecosystem is complex, and the learning curve is high.
• The technical documentation is too specialized and difficult for ordinary users to understand.

4. Treasury Governance Issues

• Low voter participation
• There is a risk of game theory attacks
• Whales may have too much influence on decision-making.

SWOT Analysis of Polkadot

Advantages ( Strengths )

• Technological Innovation: OpenGov, XCM V3, etc.
• Strong developer base
• Rich multi-chain ecosystem

劣势(Weaknesses)

• The token price is below expectations.
• High user threshold
• The DeFi ecosystem is not mature.

机会(Opportunities)

• Increase user engagement
• Innovative concepts and technologies
• Use idle funds to develop the ecosystem

威胁(Threats)

• Treasury Governance Challenges
• Competitive pressure
• The market outlook is not optimistic.

Future Development Strategy of Polkadot

1. Polkadot's "governance framework"

Establish a framework similar to national governance, including:

• Technical Department
• Public Relations Department
• Investment Department
• Governance Department
• Activity Department

2. The 10 Strategic Goals of Polkadot Treasury Governance

1. Support the development of LSDFi and DeFi projects
2. Timely launch of public chain incentive program
3. Encourage the development of RWA, Web2.5, and DePIN.
4. Continuously build public goods
5. Build a civic system
6. Design the long-term plan for Polkadot's Odyssey
7. Let Polkadot become a technological evergreen.
8. Make Polkadot the core of the entire chain
9. Launch ecological joint publicity and promotion
10. Establish a feedback iteration mechanism

3. Three areas for improvement

1. Improve Inflation: Dynamic Adjustment of Inflation Rate
2. Improve operations and lower the threshold
3. Improve Governance Functions

4. Possible objections in the solution.

• How to make the treasury support without affecting the price of DOT
• Does the strategy contradict the purpose of decentralization?
• How to avoid profit transfer

Conclusion

Polkadot, as an important project in the Web3 field, faces both opportunities and challenges. By implementing the above strategies and optimizing the governance framework, Polkadot is expected to occupy an important position in the future full-chain ecosystem. The key is to balance technological innovation, user experience, and ecological development while maintaining sensitivity to market changes. We look forward to Polkadot overcoming the current difficulties and achieving long-term sustainable development.