Polkadot DAO Approves DOT Supply Cap at 2.1 Billion
The Polkadot DAO has passed a proposal to cap the DOT token supply at 2.1 billion. Until now, DOT had no maximum supply limit. The change was approved in Referendum 1710 on the “Wish For Change” track, with 81% of votes in favor.
Polkadot announced on X that new DOT issuance will decrease every two years on March 14, also known as Pi Day. This will reduce token emissions and increase scarcity in the market.
Impact of the Supply Cap on DOT
Currently, 1.6 billion DOT tokens exist. The network adds 120 million DOT annually through its consensus model. Without the supply cap, the total supply could have reached 3.4 billion. With the cap, it is expected to stabilize near 1.9 billion.
A user on X praised the move, calling the “2.1B hard cap initiative excellent and a crucial step for long-term value.”
Excessive token issuance can harm market dynamics. If demand is low and supply grows fast, the token’s price may drop significantly.
At the time of writing, DOT trades near $4.34 with a market cap of $7.03 billion. Despite Referendum 1710’s importance, DOT’s price has been steady, failing to break above $4.60 last week. It ranks as the 24th largest crypto asset by market capitalization, according to CoinMarketCap.
Polkadot’s Market Decline Since 2021
Launched in May 2020, Polkadot gained early attention for its parachains architecture. It was founded by Gavin Wood, a co-founder of Ethereum. The project built a strong community and industry presence.
However, interest in Polkadot has declined over recent years. DOT’s price peaked at $55 in November 2021 but has since fallen by 92%.
