Polkadot Strategic Report: How to Achieve Breakthrough Development?

Introduction

Hello everyone who is interested in the development of Polkadot, we are the Polkadot Ecosystem Research Institute. As a team focused on studying Polkadot and its ecological development opportunities, we have received support from the Polkadot treasury six times in a row.

Recently, there has been an increasing voice of disappointment in the Polkadot community, with many seeing no hope and even leaving the ecosystem, which is something we do not want to see. With the launch of OpenGov, governance rights are gradually being transferred to the community, and we can become a driving force for the development of Polkadot. Therefore, we have decided to shift from passive research to active participation and propose this Polkadot growth strategy report, addressing the most pressing issues and suggesting improvement ideas.

This article will directly address the market rather than being limited to technology and ideals. We see many teams actively proposing solutions, but they often target a single issue and lack a holistic perspective. We hope to unify the solution to multiple problems under a strategic thought system.

We welcome everyone to point out shortcomings and propose actionable suggestions for improvement, so that we can work together to promote the better development of Polkadot.

The Current Status of Polkadot

In the past six months, Polkadot has achieved two important milestones: the launch of OpenGov introduced an advanced governance model; the release of XCM V3 improved the messaging format. Infrastructure development remains strong, and developer activity has significantly increased.

However, Polkadot still faces some difficulties. The price of DOT is unstable, user activity is declining, the development of ecological projects is sluggish, and there are issues with treasury governance. Overall, while Polkadot continues to innovate, it also faces challenges.

1. Technical Update Status

Polkadot continues to improve its technology and features, achieving two significant updates in the first half of this year:

• OpenGov: A new governance model that achieves decentralization through community voting and checks and balances.
• XCM V3: The latest version of the cross-consensus message format, supporting external network bridging, NFT transfers, and other functionalities.

After the complete delivery of Polkadot 1.0, the vision of 2.0 has introduced several new concepts and technologies:

• Accord( Agreement): A voluntary treaty across multiple chains.
• SPREE Technology: Runtime logic fragments based on relay chains.
• Project CAPI: A middleware project promoting DApp development based on Polkadot.

Polkadot will also invest in several technological updates, including the ZK primitive library and Hermit Relay.

2. On-chain situation

According to the Messari report, the on-chain situation of Polkadot in Q2:

• Development activities maintain an upward trend, ranking first in submission counts and active developers.
• Daily active accounts decreased from 6,290 to 5,810.
• Income fell from $120,000 to $81,000.
• The total locked value of the parallel chain has decreased to 146.77 million USD.
• The staking rate of DOT is 46%, with a return rate of approximately 9%.

3. Developer Situation

According to Electric Capital data, Polkadot has 645 full-time developers, a total of 1,923 people, ranking second in the industry. Full-time developers account for approximately 33.54%.

4. Ecological situation

The Polkadot ecosystem has 580 related applications. XCM V3 has attracted widespread attention. Moonbeam and Nodle have the highest number of active accounts, with Moonbeam leading in TVL. Slot auctions allocate access to relay chains. Multiple projects have made progress.

5. Market Capitalization Situation

As of October 11, the market value of Polkadot is approximately $3.375 billion, ranking 14th. It has shown a downward trend in recent months, with a price drop of 31.87%.

In comparison, the market capitalization of Cosmos is approximately 2.598 billion USD. Layer 2 solutions like Optimism and Arbitrum are performing well.

6. Social Media Situation

Polkadot's official media includes the official website, Twitter, Reddit, YouTube, etc. It provides project information, dynamic updates, and community communication. Overall, social media is relatively rich.

7. Treasury Governance Situation

OpenGov has improved governance efficiency, but faces issues such as uneven voting rates and rapid treasury expenditures. The approval rate is relatively low, especially for the treasury track.

Problems Facing Polkadot

1. Economic model issues

• The inflation rate is relatively high at approximately 7.38%
• DOT has fewer use cases.
• Concerns about the value of tokens

( 2. Operational Issues

• On-chain data performance is poor
• Low engagement on social media
• Lack of a comprehensive data website showcasing the ecosystem

) 3. User threshold issues

• High difficulty of operation
• High learning cost
• The technical documentation is highly specialized.

4. Treasury Governance Issues

• Low voter turnout
• Game Theory Attack Risk
• The influence of non-representative ### whales is too large ###

SWOT Analysis

( advantages

• Technological Innovation
• Strong developer base
• A relatively rich multi-chain ecosystem

) Disadvantage

• Token price is below expectations
• The user threshold is too high
• The DeFi ecosystem is not mature.

Opportunity

• Increase user engagement
• Innovative concepts and technologies
• Utilize idle funds

threat

• Treasury Governance Challenges
• Competitive pressure
• The market outlook is not optimistic.

![Ten Thousand Character Strategic Report: Token Application Scenarios are Scarce, Data Metrics Growth has Stagnated, How Should Polkadot Break the Situation?]###https://img-cdn.gateio.im/webp-social/moments-0011f25a273d71f456270302c09c1896.webp###

Macroeconomic Analysis of Polkadot's Status

( 1. Endgame Perspective

The future landscape of public chains may be a full-chain map: different public chains/Layer 2 interconnected through cross-chain protocols. Polkadot plays a role as the multi-chain ecosystem with the highest internal security, suitable for entities to collaborate under equal security.

) 2. Periodic Angle

Polkadot's development is influenced by the macroeconomic environment and the industry cycle. Measures need to be taken at the appropriate time, such as public chain incentive programs.

![Ten Thousand Word Strategic Report: Token Application Scenarios Are Scarce, Data Metrics Growth Stagnates, How Can Polkadot Break the Deadlock?]###https://img-cdn.gateio.im/webp-social/moments-b4d30b765efb3d2745645bcb1f58aa0f.webp###

How can Polkadot break through in the current market?

( Overall Approach: Gather the Power of Governance

• Promote the coordinated development of official and decentralized governance
• Formulate a strategic development outline for treasury governance
• The official raised the upper limit, and the treasury governance raised the lower limit.

) values the balance between price and development.

• Non-official governance participants should pay attention to the value of DOT
• Pay attention to the impact of prices on business operations

Strategic Positioning and Objectives

• Positioned as a multi-core computer from a full-chain perspective
• The goal is to achieve growth and enhance market value attractiveness.

solution or idea

1. Polkadot's "governance framework"

Establish a framework similar to national governance, including:

• Technical Department
• Public Relations Department
• Investment Department
• Governance Department
• Activity Department

Build a "citizen" identity for the Polkadot ecosystem.

![Ten Thousand Character Strategic Report: How Can Polkadot Break Through with a Lack of Token Application Scenarios and Stagnant Data Indicator Growth?]###https://img-cdn.gateio.im/webp-social/moments-b26aecea79a33718530d2b246fab7ae7.webp###

(# 2. Ten Strategic Goals for Polkadot Treasury Governance

1. Support the development of LSDFi and DeFi projects
2. Timely launch of public chain incentive program
3. Encourage the development of RWA, Web2.5, DePIN
4. Continuously build public goods
5. Build a Citizen System
6. Design the long-term plan for Polkadot's Odyssey
7. Make Polkadot a technological evergreen.
8. Let Polkadot become the core of the entire chain.
9. Mobilize ecosystem participants to jointly promote and publicize
10. Establish a feedback iteration mechanism

![Ten Thousand Character Strategic Report: How Can Polkadot Break the Deadlock with a Lack of Token Application Scenarios and Stagnant Data Metrics?])https://img-cdn.gateio.im/webp-social/moments-2aa4f5f4c3f6e3ae62b38bc1a3101394.webp###

(# 3. Three areas for improvement

• Improved Inflation: Dynamic Adjustment of Inflation Rate
• Improve operations and lower the threshold
• Improve governance functions

)# 4. Possible objections in the plan

• How to ensure that treasury support does not affect the price of DOT?
• Do these strategies violate the principle of decentralization?
• How to avoid incentives leading to benefit transfer?

Afterword

The development path of Polkadot is full of challenges, but we should explore new possibilities in the spirit of Web3. Although this is a path less traveled, we will continue to move forward. Please maintain patience and perseverance to jointly promote Polkadot's breakthrough development.

"The pessimist is always right, the optimist is always moving forward"

![Ten Thousand Words Strategic Report: With a Lack of Token Application Scenarios and Stagnation in Data Metrics Growth, How Can Polkadot Break Through?]###https://img-cdn.gateio.im/webp-social/moments-b459ef5effb46f274c852d4a0a875c2b.webp###