Quick overview of Polkadot Q3 earnings: where did the $21 million spend?

compile | Odaily Planet Daily

Translator | Azuma

! [Quick Glance at Polkadot Q3 Earnings Report: Where Did the $21 Million Spend?] ](https://img-cdn.gateio.im/webp-social/moments-7f230462a9-823bafc064-dd1a6f-69ad2a.webp)

On October 19, Polkadot community researcher Alice und Bob released Polkadot’s 2023 Treasury Spending Report at the Governance Forum, which was compiled by herself, based on community proposals and Treasury flows, covering Treasury spending and disaggregated statistics as of October 18.

The following is the full text of the report, compiled by Odaily Planet Daily.

Overview

2023 is not over yet, but we have seen a significant increase in Treasury spending in both DOT and USD compared to 2022. So far this year, Treasury has allocated a total of approximately 3.9 million DOTS, or approximately $21 million, compared to approximately 1.7 million DOTS, or approximately $13 million, in expenditure for the same period in 2022.

! [Quick Glance at Polkadot Q3 Earnings Report: Where Did the $21 Million Spend?] ](https://img-cdn.gateio.im/webp-social/moments-7f230462a9-1ce2c28369-dd1a6f-69ad2a.webp)

Expense category

In this report, we summarize all spending into four main categories: development, outreach, operations, and research, and other additional expenditures are consolidated into other categories.

• “Development” expenditure consists mainly of financial support for various software developments;
• “Operational” expenses mainly include software and hardware costs incurred by operating the network and related ancillary services (such as browsers);
• “Promotion” expenditure mainly includes all media marketing, social activities, educational activities related expenses;
• “Research” expenditure consists primarily of the costs of completing various types of research, reporting and analysis.

Spending on “development” and “operations” has doubled compared to 2022, with spending on “promotion” increasing by less than 10% and spending on “research” increasing by about 65%.

! [Quick Glance at Polkadot Q3 Earnings Report: Where Did the $21 Million Spend?] ](https://img-cdn.gateio.im/webp-social/moments-7f230462a9-54945b5f7a-dd1a6f-69ad2a.webp)

! [Quick Glance at Polkadot Q3 Earnings Report: Where Did the $21 Million Spend?] ](https://img-cdn.gateio.im/webp-social/moments-7f230462a9-916096d13a-dd1a6f-69ad2a.webp)

Side-by-side comparison

Looking at the four spending categories, “development” accounted for nearly half of the spending, “promotion” accounted for 38%, “operations” accounted for 9%, and “research” and “other” accounted for only about 2%.

! [Quick Glance at Polkadot Q3 Earnings Report: Where Did the $21 Million Spend?] ](https://img-cdn.gateio.im/webp-social/moments-7f230462a9-1d5dce1cb1-dd1a6f-69ad2a.webp)

However, if we compare the changes in the proportion of various types of expenditure in the past few years, it can be seen that the “relative importance” (that is, the proportion of expenditure) of various types of expenditure does not fluctuate much, which shows the stability of ecological development to a certain extent.

! [Quick Glance at Polkadot Q3 Earnings Report: Where Did the $21 Million Spend?] ](https://img-cdn.gateio.im/webp-social/moments-7f230462a9-20ced771e1-dd1a6f-69ad2a.webp)

More microscopic subcategories

After studying the proposal, we decided to take a more microscopic view of Polkadot’s spending. Next, we will continue to break down a number of sub-categories within the above four categories to see more specific amounts (Odaily Planet Daily Note: There is some overlap in spending in various subcategories).

! [Quick Glance at Polkadot Q3 Earnings Report: Where Did the $21 Million Spend?] ](https://img-cdn.gateio.im/resized-social/moments-7f230462a9-d1eefb87ec-dd1a6f-69ad2a)

The first is the “Development” category, on which Polkadot has spent a total of $18 million so far (not just in 2023), accounting for 50% of all total spending.

• Funding for wallet development totaled $6.4 million, which is also the largest spending subcategory;
• Funding for Substrate-related development (e.g., client, development tools) totals $3.3 million;
• $2.6 million allocated for cross-chain bridge development;
• Smart contract support (mainly Ink!) language) is $1.1 million;
• $850,000 in multisig tool development;
• $830,000 in block explorer development grant;
• $810,000 in governance tool development grant;
• Agreed subsidies totaling $1.1 million, including spending on public services and subsidies for regular ecological projects;
• Other development efforts were also funded, such as ZKs, SDKs, light clients, privacy, fraud prevention, RPC, and staking, totaling approximately $1.4 million.

This is followed by the “promotion” category, which has been spent to date totalling $14 million, or about 38% of total spending. Within this category, it is often difficult to reclassify the individual details because there is always a large overlap.

• Largest spending items included hackathons, development training, webinars, incubators, etc., totaling $4.4 million;
• Hosting eco-conferences (e.g. Decoded, Sub0) cost a total of $3.4 million;
• Expenditure on media outreach and education activities totalled $3.6 million;
• Total expenditure of $2.3 million on behalf of Polkadot;
• Funding for events, primarily parties, totaled $250,000.

Then there’s the “Operations” category, where while Polkadot operates through staking rewards ($46 million per year) rather than treasury, ancillary services created for regular users cost a total of $3.1 million, or 9% of the total cost.

• RPCs, nodes, and indexing services spent a total of $1.6 million;
• $840,000 spent on governance tools and other browsers;
• $660,000 in prizes for anti-fraud efforts;
• Software services and snapshot-related expenses were $72,000.

Finally, there is the “research” side, which totals $730,000 in related costs.

• Half of that expenditure ($350,000) went to Messari to commission original research that could be done in two months by an intern or ChatGPT… (Alice und Bob’s exact words seem to be quite unhappy with this expenditure…) ）
• Other expenses include multiple studies related to decentralization, validator selection, candle auctions, network carbon emissions, legal guidance, data tools.

Summary and outlook

Alice und Bob concluded that the data for the report comes from scraping and manually categorizing Treasury expenses.

Alice und Bob went on to express the hope that this report will help the Polkadot community better understand the ecological spending situation over the past few years, inform future decision-making and budget considerations, and find more effective funding allocations.

In addition, Alice und Bob suggested that Polkadot build a dedicated budget and expenditure tracking infrastructure so that the community can better understand the situation and improve the efficiency of discussion and decision-making on specific topics.