- Polkadot has approved a proposal to limit its native token supply to 2.1 billion DOT for the first time.
- The change ends the previous model of indefinite yearly token issuance and introduces a gradual reduction in new tokens every two years.
- At the time of the decision, the circulating supply was about 1.5 billion DOT.
- Polkadot has launched the Polkadot Capital Group to connect traditional finance firms with its blockchain infrastructure.
- DOT’s price fell nearly 5% shortly after the new supply cap was announced.
Polkadot’s decentralized autonomous organization (DAO) has passed a new rule capping the maximum supply of its native token, DOT, at 2.1 billion. The referendum marks the first time the network has set a hard limit on its token supply.
Previously, the platform ran on an inflationary system, which meant about 120 million new DOT tokens were issued each year without a supply limit. Under this model, projections indicated the total supply could have topped 3.4 billion tokens by 2040.
With the new cap, DOT issuance will now decrease every two years, starting on March 14, also known as Pi Day. As of the decision, there were about 1.5 billion DOT in circulation. Polkadot shared a chart comparing future supply growth under the old and new systems. The group expects that the fixed cap will help make the token’s value more predictable and less affected by inflation.
At the same time, Polkadot launched its Capital Group division. This new arm aims to build stronger links between Wall Street firms and Polkadot‘s blockchain. The initiative focuses on helping institutions find opportunities in areas such as asset management, venture capital, decentralized finance (DeFi), and trading. It will also highlight use cases like staking and the tokenization of real-world assets.
Despite the announcement, DOT’s price dropped from $4.35 to $4.15, a decline of nearly 5%, according to CoinGecko. The project expects that the new supply rule may encourage scarcity and long-term stability, though it had no immediate positive effect on the token’s value.
Polkadot has not commented further on the changes at this time. For more details, readers can review the official announcement here.
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