What happened?

The Polkadot Decentralized Autonomous Organization has approved a hard cap of 2.1 billion for its native token, DOT. This shift from the previous inflationary model with no maximum supply was made possible through Referendum 1710, a process designed to get community consensus on proposed updates.

Who does this affect?

This decision affects all participants in the Polkadot ecosystem, notably holders and developers. The move towards a fixed supply will introduce predictability for these stakeholders. This is in line with features of many blockchain ecosystems that see preordained scarcity as essential for long-term sustainability.

Why does this matter?

This change may transform how DOT is perceived in the market as predictable issuance and a capped supply offer clearer monetary policy signals than before. Businesses and developers often consider token supply structures when assessing the stability and potential value of a network. Following this decision, Polkadot has joined other blockchains that limit supply growth to ensure economic sustainability.