Cardano vs Polkadot: will Cardano repeat Polkadot’s treasury mistake?

Cardano’s governance and treasury system have become hot topics as the market struggles and emotions run high. Some voices are warning that Cardano is “following Polkadot’s path” and will drain its treasury on wasteful marketing and questionable proposals. To understand whether that fear is justified, it helps to look closely at what actually happened to Polkadot, how Cardano is set up differently, and where Cardano still needs to improve.

What went wrong with Polkadot’s treasury

Before mid-2023, Polkadot used a more traditional DAO-style structure, with a council and technical committee overseeing the treasury. The council proposed spending, could veto malicious proposals, and acted as a gatekeeper for funds.

Many in the Polkadot community felt this structure was too slow, too centralized, and not representative of DOT holders. In June 2023, Polkadot shifted to an “OpenGov” model that put treasury proposals directly in the hands of token holders and stripped away most of the previous safeguards.

In practice, this meant that relatively small amounts of DOT could push proposals through. Around 7–15 million DOT (roughly $40–80 million at the time) was enough voting power to approve spending. With few brakes and a lot of optimism, the treasury started bleeding fast.

How fast Polkadot burned its treasury

In the first half of 2024 alone, Polkadot spent about $87 million from its treasury. After that, only around $188 million remained, giving the project roughly a two-year runway at that burn rate.

Of that $87 million, about $36 million went to “outreach” – a broad bucket that included marketing, events, business development, and community initiatives. That single category dwarfed spending on research, operations, talent, and education, which together received around $25 million.

Across all of 2024, Polkadot spent roughly $48 million on outreach and burned a total of $133 million from the treasury. In 2025, spending was cut back to about $70.6 million, with $17.2 million going to outreach. By June 2026, public dashboards suggested only around $41 million remained in the treasury.

Despite all that spending, Polkadot’s market position deteriorated, and DOT slipped down the rankings. That’s why many now argue that the project “wasted” its treasury on ineffective marketing.

Why Polkadot’s marketing spend didn’t pay off

On paper, some of Polkadot’s marketing moves looked huge: sponsoring Lionel Messi’s jersey, backing IndyCar and NASCAR, and paying large KOL (key opinion leader) management firms and influencers. These are the kind of high-visibility plays that can work well in a roaring bull market, when new retail money is flooding in and people are eager to buy anything with a strong narrative.

The problem is that Polkadot pulled the trigger in a bear market, when retail attention was minimal and risk appetite was low. The timing was off. Without strong underlying demand, even massive exposure doesn’t easily translate into new users or sustained token buying.

Compare that with crypto.com in 2021. The exchange signed a 10-year deal with the UFC, renamed the Staples Center to Crypto.com Arena, partnered with Formula 1 and FIFA, rolled out debit cards, and ran the famous “fortune favors the brave” campaign with Matt Damon. All of this happened as a major bull market was kicking off, and the CRO token exploded in price—even though the platform itself wasn’t fundamentally unique at the time.

Polkadot tried a similar playbook, but at the wrong point in the cycle. On top of that, many of the KOL campaigns under-delivered. Posts showed big impression counts but weak engagement, suggesting that content was pushed to the wrong audience or that bots were used to inflate metrics. When you’re paying millions out of the treasury, that kind of waste is dangerous.

Content creators vs paid influencers

A big part of the confusion comes from lumping all “marketing” together. In reality, there’s a huge difference between genuine content creators and paid influencers.

Content creators who matter in crypto typically:

• Build a real, trusted audience over time
• Co-create content that educates, explains, and gives honest opinions
• Are accountable to their community and care about long-term reputation
• Can be measured: you can track what their audience does after seeing the content

There’s also a weaker form of “content creator marketing” where someone is simply paid to post because they have a large following. That’s already a step closer to pure influencer marketing.

Paid influencers are usually compensated per post or per campaign, with the goal of raw reach rather than depth:

• They often don’t care about the project beyond the paycheck
• Scripts and posts may be written by agencies, not the influencer
• Engagement is shallow, and the effect stops as soon as payments stop
• The model is highly vulnerable to fake metrics and bot traffic

Good content creators sit somewhere between education, narrative-building, and attention-renting. They can bring in buyers, builders, investors, and partners, but they’re not a replacement for real business development and in-person relationship building.

How events and creators work together

Events and conferences are where many serious conversations and deals actually happen. But they’re much more effective when attendees already recognize the brand or ecosystem.

Content creators can “prime” audiences before events by:

• Explaining the tech and roadmap
• Covering upcoming conferences or hackathons
• Sharing success stories and use cases

Then, when potential investors or partners see the project’s booth at an event, they already have context and are more likely to engage. This is where content and events become symbiotic.

Creators also help holders build conviction. They explain why a chain matters, highlight long-term value, and counter misinformation. That’s part of why many Cardano holders have stayed through wild price swings—from under $0.10 to $3 and back down again.

Does treasury selling always crush price?

Another common fear is that treasury spending automatically creates unbearable sell pressure. Polkadot’s experience shows that the story is more nuanced.

Most of Polkadot’s heavy treasury withdrawals happened in the first half of 2024. During that period, DOT’s price did rise, though not as strongly as some other majors like Ethereum or Cardano. It’s possible that treasury selling muted the upside—but it clearly didn’t prevent a move up altogether.

On the flip side, look at XRP, which barely moved in early 2024 but then rallied hard later in the year. The bigger lesson is that when real buy pressure and strong narratives are present, markets can absorb significant sell pressure. Simply being in the top 10 or top 20 by market cap isn’t enough; people need a compelling reason to buy and hold.

If you’re interested in how market structure and narratives affect specific assets, you may also want to read our analysis of whether ADA is close to a bottom or facing more downside.

How Cardano’s treasury design differs from Polkadot

Cardano’s system is not a copy of Polkadot’s OpenGov. Several structural safeguards make it harder to repeat the same mistakes.

The net change limit (NCL)

Cardano uses a net change limit (NCL), which caps how much can be spent from the treasury in any 12-month period. This cap must be approved by delegated representatives (DReps) and cannot be exceeded.

In the last 12 months, Cardano’s treasury inflows were around 315 million ADA, while the current NCL is set at 350 million ADA. So even in a high-spend year, the system can’t suddenly drain the treasury in the way Polkadot did.

Over time, treasury inflows are designed to decrease, with the expectation that higher transaction volume will offset this. That makes growing real usage a necessity, not a luxury.

Runway: worst and best case

If Cardano were to keep spending at current levels and none of that spending led to growth—no extra users, no extra transactions—the treasury might last around seven years. But in that scenario, the bigger problem wouldn’t be the treasury; it would be that stake pool rewards would fall, running pools would become unprofitable, and the network would centralize and weaken.

In a better scenario, where spending successfully drives adoption and transaction volume, the treasury could last decades—30+ years or more—and potentially become self-sustaining as inflows match or exceed outflows.

Higher voting thresholds and constitutional checks

Cardano also differs from Polkadot in how proposals are approved:

• Proposals require a minimum level of ADA voting power to pass, and the threshold is relatively high compared to Polkadot’s early OpenGov setup.
• An elected Constitutional Committee reviews proposals to ensure they comply with Cardano’s constitution before they can be enacted.
• Many proposals submitted via Intersect (Cardano’s member-based organization) are milestone-based, meaning teams only receive funds as they hit predefined KPIs. This spreads out any sell pressure and ties payments to delivery.

For proposals submitted outside Intersect, there’s a significant activation deposit—currently 100,000 ADA. That alone filters out a lot of low-effort or opportunistic proposals.

Where Cardano still needs to improve

Even with these safeguards, Cardano is not immune to bad decisions. There are several areas where the ecosystem can and should tighten standards.

Subject-matter expertise in voting

Many DReps hold substantial voting power but lack deep expertise in the areas they’re voting on—whether that’s protocol engineering, marketing, or business development. Some voting rationales are weak or even illogical, such as changing a vote based on short-term price moves, despite the treasury being denominated in ADA, not dollars.

A more robust process could include:

• Expert reviews or advisory votes before proposals go to general voting
• Independent audits for large or technically complex proposals
• Clearer standards for what “good” looks like in different categories (dev tooling, infrastructure, marketing, etc.)

Learning from Polkadot’s KOL spending

One Polkadot-funded KOL platform reportedly received around $2 million from its treasury. The same platform later secured funding from Cardano’s Catalyst program: three proposals totaling about 300,000 ADA (roughly $210,000 at the time).

According to the proposal records, that funding covered:

• 16 written articles
• A campaign using 12 KOLs to produce 60 quote posts on X (Twitter) to “amplify” Cardano announcements

The price tag for those 60 quote posts was about 100,000 ADA—roughly 1,647 ADA per post. Combined, the campaigns generated under 500,000 impressions. On paper that might sound decent, but many organic Cardano-focused accounts regularly achieve similar or better reach and engagement for free.

When the best-performing paid posts only reach a couple hundred likes each, it’s hard to justify six-figure treasury spends. This is exactly the type of KOL management spending that needs strict due diligence: who’s being paid, how much, and what concrete results are expected.

Overpaying legacy “big names”

Polkadot also paid around $460,000 to a well-known crypto media figure. A common issue with large legacy creators is that their subscriber counts reflect the 2021 bull run, but much of that audience is now dormant. Despite this, they still command high fees, even when their actual engagement is similar to or worse than smaller, more active creators.

Cardano should be wary of paying for old reputations instead of current performance. Metrics like recent engagement, audience relevance, and trackable conversions matter far more than subscriber counts from three years ago.

Catalyst funding and accountability

Cardano’s Project Catalyst is a powerful tool for funding ecosystem growth—but it also introduces risks if accountability is weak.

When a proposal is approved, teams typically receive an initial payout of around 10% of the total funding. In recent funds, there have been cases where relatively influential proposers took the initial payout and then failed to deliver on their commitments, or delivered very little. Some argue they still “intend” to complete the work eventually, but in the meantime they’ve blocked other teams from receiving that funding.

There have also been admissions from some developers that they submitted proposals for things they didn’t strictly need, simply because the funding was available. That’s a red flag for governance maturity.

To keep Catalyst healthy, the community likely needs:

• Stronger due diligence on proposers’ track records
• Independent reviews or audits for larger asks
• Clear consequences for non-delivery beyond just social pressure

Spending wisely vs stopping spending

In response to these concerns, some community members have called for drastic measures like halting all treasury spending or pausing funding until ADA hits a certain price level again (for example, $3). That kind of blanket approach is dangerous in its own way.

Cardano’s long-term health depends on continued development, tooling, real-world applications, and yes, smart marketing. If the ecosystem stops investing in itself, the “ghost chain” narrative becomes a self-fulfilling prophecy.

The goal shouldn’t be to stop spending—it should be to spend better:

• Prioritize proposals that clearly move the needle on usage, security, or developer experience
• Defer nice-to-have upgrades and tooling that aren’t urgent
• Be extremely selective with marketing, especially big-ticket KOL and sponsorship deals
• Focus on timing: save large-scale awareness campaigns for when market conditions and narratives are favorable

For a deeper dive into how Cardano is working on its core scalability and security story, you might also be interested in our guide on how the Leios upgrade aims to tackle the blockchain trilemma.

Will Cardano repeat Polkadot’s mistake?

Cardano is not doomed to follow Polkadot’s path. Structurally, it has more safeguards: a capped annual spend (NCL), higher voting thresholds, a Constitutional Committee, milestone-based funding, and meaningful proposal deposits.

However, structure alone isn’t enough. The community still needs to:

• Demand higher standards from DReps and proposers
• Insist on expert input for complex or high-value proposals
• Treat KOL and influencer spending with extreme skepticism unless metrics and accountability are crystal clear
• Resist emotional, populist calls that ignore the long-term need for investment

Done right, treasury spending can extend Cardano’s runway, grow real usage, and strengthen its position for the next major market cycle. Done poorly, it can waste precious resources. The difference will come down to governance discipline, not just the design of the system.

Cardano remains a technically ambitious blockchain with a passionate community and a long-term vision. If that community can pair its ideals with hard-nosed fiscal responsibility, there’s no reason it has to repeat Polkadot’s mistakes.