Polkadot vs Ethereum: Treasury Governance

Direct, autonomous funding: Proposals are voted on and paid directly from the on-chain treasury (~$200M+ in assets). This matters for rapid, permissionless experimentation where teams need predictable, non-dilutive capital without a foundation's approval.

Built-in burn mechanism: Unspent treasury funds are burned periodically, creating constant pressure to allocate capital efficiently. This matters for maintaining tokenomics and incentivizing active community participation in governance (e.g., via OpenGov).

Massive, established grant programs: Managed by the Ethereum Foundation (EF) and major DAOs like Uniswap and Aave Grants, with >$100M+ deployed. This matters for large-scale, strategic initiatives (e.g., client diversity, core protocol R&D) that benefit from expert curation and long-term vision.

Layer-2 and DAO-driven models: Funding occurs primarily off the L1 via DAO treasuries (e.g., Optimism's RetroPGF, Arbitrum DAO), allowing for specialized, high-volume distribution (e.g., $70M+ in OP token grants). This matters for ecosystem-specific growth and compensating public goods at scale.

Direct, protocol-controlled capital: Funded by a portion of block rewards, staking inefficiencies, and transaction fees. Holds ~43M DOT ($300M+). Proposals are approved via on-chain governance (Council & public referenda). This creates a dedicated, transparent war chest for ecosystem grants, bounties, and infrastructure.

No protocol treasury. Funding is decentralized across foundations (EF), grant programs (ESP), DAOs (Uniswap, Aave), and client teams. This fosters organic, market-driven growth but requires projects to compete for grants or bootstrap independently. Major upgrades are funded and coordinated by core developers and community consensus.

Structured, predictable funding for parachains and core infrastructure. If your project aligns with Polkadot's roadmap (e.g., building a cross-chain messaging app, a new consensus pallet), you can submit a detailed proposal for direct treasury funding. Ideal for large, capital-intensive R&D projects that require guaranteed resources.

Organic growth and community-aligned projects. If you're building a dApp (DeFi, NFT, Social) that can demonstrate user traction or clear utility, you can tap into massive DAO treasuries (e.g., Uniswap Grants, Aave Grants) or apply to the Ethereum Foundation's Ecosystem Support Program. Best for developer tools, public goods, and applications with proven demand.

• Polkadot: Faster, binding decisions via on-chain votes, but scope is limited to treasury-approved initiatives. Risk of centralization around Council preferences.
• Ethereum: Slower, deliberative off-chain coordination (EIP process, community calls), but allows any project to innovate and fundraise without permission (ICOs, token sales, DAO grants).

• Polkadot: High accountability; treasury spend is fully on-chain and auditable. Teams must deliver on milestones or face clawbacks.
• Ethereum: High flexibility; funding sources are diverse (VCs, grants, token sales). Less direct protocol oversight, but market forces provide a powerful feedback loop.

Direct, transparent funding: Proposals are voted on and paid directly from the on-chain treasury via the OpenGov system. This enables rapid, verifiable deployment of funds to projects like Moonbeam's integration tools or Acala's DeFi infrastructure. It matters for teams needing predictable, protocol-native funding without external grant committees.

Massive, diversified funding sources: Ecosystem funding is dominated by off-chain giants like the Ethereum Foundation ($300M+ endowment), ConsenSys, and major DAOs (Uniswap, Aave, Optimism Collective). This provides orders of magnitude more capital for public goods, protocol R&D (e.g., Dencun upgrade), and developer education. It matters for large-scale, foundational work that benefits the entire network.

Cons: Proposal process can be cumbersome and politically charged. Requires significant community lobbying and technical detailing for OpenGov proposals. Risk of treasury drain on non-essential spending if governance participation is low. This is a drawback for small, agile teams that need quick, lightweight funding.

Cons: No single source of truth for funding; discovery is difficult. Decision-making is opaque and subjective, reliant on the internal processes of various foundations. High competition means many quality proposals go unfunded. This is a drawback for projects that need transparent, equitable, and guaranteed access to capital.