Polkadot has officially capped the total supply of its native token, DOT, at 2.1 billion following Referendum 1710.
Announced on Monday, the proposal passed with 81 per cent voter approval, according to the Polkadot DAO, which manages the network through its OpenGov governance framework. Previously, Polkadot issued 120 million DOT tokens annually with no upper limit.
The new model introduces a two-year inflation cycle that gradually reduces token issuance. Consequently, supply growth will slow significantly over time.
The Polkadot DAO estimates that by 2040, the total supply will reach approximately USD$1.91 billion tokens, compared with USD$3.4 billion under the prior model. In addition, the supply reduction schedule will reset every two years on Pi Day, March 14. This approach aims to increase scarcity and strengthen DOT’s appeal to long-term holders and institutional investors.
Currently, around 1.5 billion DOT tokens circulate in the market. The capped supply coincides with Polkadot’s efforts to attract traditional finance players.
In August, the network launched Polkadot Capital Group, a new division designed to connect Wall Street institutions with blockchain infrastructure. Furthermore, the initiative highlights real-world asset tokenization, staking, decentralized finance (DeFi), and other institutional-grade crypto applications.
However, Polkadot continues to trail Ethereum in DeFi adoption. While Ethereum holds over USD$132 billion in total value locked, Polkadot and its parachains manage roughly $423 million. Meanwhile, Polkadot maintains its narrative as an Ethereum competitor, co-founded by Ethereum veteran Gavin Wood.
In addition, the capped supply and institutional push signal the network’s long-term strategy to enhance value and adoption. Consequently, DOT investors may anticipate reduced inflation and a clearer path toward scarcity-driven growth.
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Platform consensus mechanism reduces energy consumption
This governance shift reflects Polkadot’s effort to balance tokenomics, attract institutional interest, and create a more sustainable ecosystem for the future.
Polkadot is a blockchain platform designed to connect multiple specialized blockchains into a single network. Launched in 2020, it enables interoperability between independent chains, allowing them to share data and security. Consequently, developers can build decentralized applications (dApps) that interact seamlessly across different blockchains.
The network relies on a central relay chain that coordinates communication and maintains overall security. In addition, Polkadot supports parachains—parallel chains optimized for specific purposes such as DeFi, gaming, or identity verification.
Furthermore, the platform uses a nominated proof-of-stake (NPoS) consensus system, which enhances scalability while reducing energy consumption compared with traditional proof-of-work networks.
Polkadot also emphasizes governance, allowing token holders to vote on upgrades, protocol changes, and network parameters.
This approach ensures community-driven development and long-term sustainability. Further, developers can deploy forks and experiments safely using test parachains, which reduces risk. However, Polkadot faces competition from Ethereum and other smart contract platforms in attracting developers and users. Meanwhile, its modular architecture and focus on interoperability position it as a strong candidate for connecting the growing ecosystem of blockchains.
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