Polkadot (DOT)
Polkadot (DOT) is a multi-chain network that aims to connect different blockchains and has its own native token. In the current structure, approximately 120 million DOT were produced and entered circulation each year. This meant that, theoretically, there was no upper limit on the total supply, causing the annual inflation rate to exceed 10% from time to time.
Towards the end of 2025, the community put Proposal 1710, known as “Hard Pressure,” to a vote. The main goal of this proposal was to cap the total DOT supply at 2.1 billion and then gradually reduce the amount of tokens minted every two years. 81% of the community voted “yes” to the proposal, and the transition to the new model was approved. The first supply cut was scheduled to take effect on March 14, 2026. With this change, the annual inflation rate is expected to drop to approximately 3.11% by March 2026.
Key Elements of the Hard Pressure Model
The Hard Pressure model is based on two main rules. The first is that the total DOT supply cannot exceed 2.1 billion units. The second is that the amount of tokens minted will be reduced every two years. This structure creates a supply dynamic similar to the halving mechanism used in Bitcoin.
With the first cut, the annual minting of 120 million DOT will be reduced by approximately 55%, and the new annual issuance amount will drop to approximately 55 million DOT. In subsequent periods, only 13% of the unminted tokens will be released to the market. Within this framework, the new supply is projected to drop to approximately 44 million in the 2028–2029 period and 33 million in the 2030–2031 period, falling to a few million DOT by the mid-2040s. Polkadot thus aims to reduce the inflation rate step by step.
As a natural consequence of this model, staking rewards will also decline. According to various estimates on the Polkadot forum, staking returns (APR) could fall from around 14% to around 7% in 2026 and to around 0.16% in 2036. Some community members argue that this situation could reduce validators’ motivation to remain on the network and emphasize the view that higher inflation is necessary for network security.
Within the model, 85% of newly minted DOT will continue to be allocated to staking rewards, with the remaining 15% going to the treasury. However, due to the decrease in the total reward amount, the need to increase validator commissions or activate treasury support is also among the topics discussed within the community.
Medium and Long-Term Price Expectations
The Hard Pressure model has the potential to create a “scarcity narrative” reminiscent of Bitcoin’s halving processes. This reduction on the supply side could support sustained demand in the long term. Indeed, assessments by Nasdaq also suggest that while the price may not immediately surge after the first reduction, it could support value creation in the long run.
| Model | Total Supply Limit | Annual Issuance (2025) | First Cut (2026) | 2040 Supply Projection | 2026 Annual Inflation |
| Old Model | Unlimited | 120 million DOT | No Cutoff | Over 3.4 billion DOT | ≈ 7.5% |
| Hard Pressure | 2.1 billion DOT | 120 million DOT | ≈ 56–57 million DOT (≈ 52.6% reduction) | ≈ 1.91 billion DOT | ≈ 3.11% |
*The table summarizes the key differences between the old and new models.
The price of an asset is fundamentally shaped by the balance of supply and demand. Although Polkadot has implemented the Hard Pressure model to solve the structural problem on the supply side, the demand factor on the other side of the equation will continue to be decisive. Reducing the supply of an asset may not always be enough to make it more valuable on its own; this process needs to be supported by other parameters.
For example, the effectiveness of Coretime sales, the activity of parachains on the network, and how much fee revenue the Polkadot network can actually generate are key factors here. Investors want to see concrete data, and demand formation is shaped by this data.
If such indicators are strongly and sustainably supported in the eyes of investors, price expectations can naturally be revised upward. The decrease in open positions in the derivatives markets also indicates that the market is in a cautious wait-and-see mode. In order to clearly assess demand dynamics and the actual functionality of the network, the model needs to be fully established and the direction of the data needs to be seen. This process will largely be able to present a clearer picture to investors towards the end of 2026.
Ultimately, the stage will largely belong to the demand side going forward. The more actively DOT is used, the more revenue it generates, and the more indispensable it becomes within the ecosystem, the more meaningful the narrative on the price side can be. Otherwise, the risk of it remaining a low-inflation but limited-demand asset persists.
Disclaimer
This content is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are highly risky.
