What can thirty-seven million dollars do for you? Or rather, how will you spend thirty-seven million dollars on a marketing spree?
Last week, Crypto Twitter was buzzing after Polkadot released its 2024 first-half Treasury Report, highlighting how funds were spent during the period and detailing the protocol's assets and liabilities. An estimate of 250,000 dollars is spent monthly on salaries, but what caught everyone's attention was the $37 million spent on attracting new users to Polkadot, which grew from over 300% when compared side by side with the marketing budget for H1 of 2023.
While this may seem very significant, it might be justified if the cost of acquiring users is favorable relative to the amount spent.
Lessons Must Be Learned
How Polkadot spent $37m for Outreach
You can't be the only one wondering where the $37M for Polkadot’s outreach went to. Here are some receipts 👇🏽
- Taxi and Uber ad in Berlin.
- Sponsored the Indy500, an annual automobile race, with Conor Daly to raise awareness about blockchain. The Polkadot logo was placed on a racing car.
- 10k monthly salary for ambassadors.
- Influencer marketing consumed almost $5 million.
- $6.8 million on a sports sponsorship deal with Inter Miami CF a soccer club.
- Private jet fleet branding for 6 months at $180k.
- Sponsored community building by Chainwire for $100k.
- More ‘community projects’ with top crypto parasites for $208k.
The list is endless, find the bulk of receipts
Is Polkadot Doing Badly?
As per Dotlake’s report on X:
- Polkadot witnessed a 33% increase in monthly signed transactions in June, last month.
- Number of unique accounts remained stable at 7 million.
- Through a gaming development approach by Mythos, 800,000 new accounts came in.
- 853 million DOT tokens were staked.
- There has been a 66% month-over-month increase in the number of governance proposals, indicating a significant rise in activity or interest in governance matters.
- The current total number of proposals, including ongoing ones, is 151. Out of the total proposals, 43% have been approved. 17% of the proposals have been rejected.
- The total value of assets in Polkadot’s treasury totals 167 million dollars which is estimated to keep the organization running for the next two years.
Maybe, Just Maybe, Polkadot Still Won 🏆
The Way Forward
It shouldn't sound new to you that millions of dollars are squandered in the crypto space for “marketing aesthetics.” So, Polkadot is neither going to be the first nor the last.
📌 If the budget for outreach is substantial, it could be a red flag. Why spend so much to acquire users and pay influencers to promote your project if the product has a real use case?
The CEO of Celestia Labs is one of the few who also thinks it's cringe-worthy to hire influencers for shilling.
The importance of doing your research by examining the use cases of Web3 projects before investing, rather than relying on hype, can not be overemphasized.
📌 For a business-to-developer model like Polkadot, the focus should be on building products that developers find user-friendly, rather than targeting KOLs with non-technical audiences or spending on physical ads where the target audience may not be found. Hosting hackathons is one effective way to target and engage developers.
📌 Marketing entails not just getting new users but retaining them. A closer look at Polkadot suggests some users lost trust in the project after getting hacked. When trust is lost, it is difficult to get it back, and splashing money around will be like pouring water on the rock.
📌 Polkadot's claim of being a fully decentralized autonomous organization (DAO) is marred by corrupt practices in pushing proposals, which contradicts a decentralized process. Notably, a screenshot attached above shows an X user being asked to become an ambassador with the assurance, 'We can work behind the scenes to make sure you get elected.'
📌 There’s no one-size-fits-all for stunt marketing. Printing your logo on the largest billboard is risky, and you must weigh the cost against the potential for generating new users. Experiments are okay in marketing, but don’t be frivolous with spending. Ensure you're taking big shots where your audience can be found.