Polkadot Community Approves Increasing DOT Total Supply to 2.1 Billion Tokens

Polkadat DAO and the smart decision

In a pivotal move signaling the maturity of decentralized governance, Polkadot’s DAO has unanimously voted in favor of hard capping the supply of native DOT tokens at 2.1 billion, marking the end of nearly a decade of unlimited issuance.

Referendum Bill 1710, passed with 81% approval on September 14, 2025, through the OpenGov framework, introduced a deflationary trajectory by phasing out new token issuance every two years, promoting scarcity and investor predictability in a network known for parachain interoperability.

The overhaul comes as Polkadot aims for institutional adoption through Capital Group launched in August, connecting Web3 with Wall Street for DeFi, staking, and tokenization of RWA.

The Polkadot ecosystem, after years of community discussion on the impact of inflation, has culminated with Referendum 1710 on the topic “Want Change” – an opinion gathering tool within OpenGov, launched in 2023 to empower token holders with proposals, votes or delegations.

With over 5 million holders participating indirectly through staking (currently at 55%), the vote received 81% approval, reflecting broad consensus on limiting the annual minting of 120 million DOTs to serve as staking rewards and fund the treasury.

Building a proposal idea

Polkadot's previous model, since 2017, has been to mint 120 million DOTs per year (10% inflation on current supply) to incentivize validators, nominators, and parachain auctions — essential for its relay chain to secure over 100 parachains.

However, this led to constant selling pressure from stakers receiving rewards, diluting the value and capping DOT below the $50 ATH (92% drop).

Proposal 1710 amended this: Hard Cap: Total 2.1 billion DOT, with a gradual approach to avoid security risks (e.g. insufficiently incentivized staking).

Issuance schedule: Starts at 120M/year, tapers off every two years (e.g. ~60M in 2028, tapers off to near zero after 2040), projected to 1.91B in 2040 vs old roadmap of 3.4B.

Governance Role: OpenGov's vote-by-election (longer keys amplify votes) ensures high participation; top validators like Parity Technologies abstained for neutrality.

On-Chain Impact: No immediate burn; excess issuance will be redirected to the treasury to fund the ecosystem, but the scarcity narrative reinforces DOT's usefulness in auctions and governance.

This balances security (current staking returns are around 14%) with deflation, according to Polkadot's post: "Scarcity, predictability, and long-term alignment."

Impact on Polkadot and Layer-0

The issuance reduction could halve inflation to 5% by 2030, limit selling pressure, and increase the value of DOT in auctions/governance - essential for over 150 parachains. Aligned with Capital Group's TradFi approach, potentially unlocking billions of dollars in RWA; in contrast to Ethereum's L2 fragmentation.

81% approval through OpenGov sets the gold standard for DAOs, but staking concentration (top 10% control 40%) risks centralization. Short-term yield declines could slow staking; if demand slows ($300M TVL vs. Solana's $5B), scarcity alone won't be able to trigger price rallies.

Accelerating “Bitcoin-like” narratives for altcoins, inspiring Cosmos or Cardano adjustments as crypto market cap hits $4 trillion.

Evaluation and Conclusion

Polkadot's victory in capping DOTs at 2.1 billion opens up scarcity and synchronization, eliminating inflation in favor of a predictable future, which could greatly boost its interoperability.

With 81% support among institutional proposals, Polkadot outpaces Hyperliquid’s USDH vote in terms of size, although the price drop has dampened the hype. As Layer-0 exchanges compete with L1 exchanges like SOL/AVAX, this breakthrough in tokennomics — projected to reach 1.91 billion by 2040 — signals a resurgence of DOT, combining governance innovation with economic prudence in a maturing crypto space.

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