If we implement the idea proposed by @gavofyork, reducing network security expenditure from $500 million to $90 million. Essentially, Polkadot's security expenditure model shifts from 'locking a large amount of capital for security' → 'ensuring security more intelligently'.
1. So we may not need to use 52.25% of the total DOT for staking (to secure network safety).
Okay, now let's do a simple calculation.
Currently, the staking rate of Polkadot is 52.25%, with approximately 809 million DOT locked in staking. If the staking rate drops from 52% to 30%, it will be close to Ethereum's current staking ratio (about 29.5%).
This will release up to 345 million DOT of on-chain liquidity.
What will happen if all these DOT flow into Polkadot DeFi?
If DOT is calculated at $10, then Polkadot's DeFi TVL could easily exceed $3 billion!
This will directly push Polkadot into the top ten of global DeFi TVL, opening a new growth flywheel.
This will have at least five profound impacts:
1. Surge in capital attention: more funds included DOT and its DeFi protocols; more trading platforms launched DOT derivatives (such as collateral, lending, leverage)
2. Ecological developers and project influx. Attract more DEX, stablecoins, and lending protocols to deploy on core chains like Polkadot Hub. Drive developers to migrate or cross-chain deploy from Ethereum, Solana, etc., enhancing the diversity of the chain!
3. The on-chain utility and demand for DOT have increased. It is more widely used as LP assets, collateral, and liquid staking assets! Enhancing DOT's economic role on-chain as collateral, governance, and exchange medium!
4. Enhanced ecological valuation and financing capability
TVL is an important valuation indicator when financing Web3 projects. Once Polkadot DeFi rises, financing for parachains and dApp projects will be easier and valuations higher. External venture capital, funds, and RWA projects will be willing to launch new products on Polkadot!
5. The narrative of 'DOT is good technology but no one uses it?' will change completely:
Polkadot will transition from 'infra narrative' to 'TVL narrative'!
Becoming a key variable in the DeFi narrative: safer cross-chain, higher performance execution environment (PolkaVM, JAM), and resilient scalability
2. What impact will this have on treasury funds?
Gavin's proposed reform has another significant impact — Polkadot's treasury income will shrink dramatically.
If the current 85% inflation is given to stakers and 15% inflation is allocated to treasury funds:
Security spending decreased from $500 million to $90 million
Then the treasury's annual income will drop to only about $15.88 million
At a calculation of $5 per DOT, this means only 3.17 million DOT will enter the treasury each year.
You can see the magnitude of the decline by comparing — just in June this year, the treasury spent $28.24 million, already far exceeding this figure! data.parity.io/opengov-report…
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