Who received Polkadot's $40 million in marketing expenses?

2024.07.03

Who received Polkadot's $40 million in marketing expenses?

Fake followers, content view inflation, bot accounts—Polkadot's marketing budget has turned into a KOL promotion disaster.

2024.07.03 - 04:54:59

Navigating Web3 tides with focused insights

Fake followers, content view inflation, bot accounts—Polkadot's marketing budget has turned into a KOL promotion disaster.

Author: Jack, BlockBeats On June 29, a Polkadot community member released the 2024 mid-year treasury operations report for Polkadot. The treasury spent a total of $87 million in the first half of the year. At this current spending rate, these reserves will only last another two years. Surprisingly, Polkadot spent $37 million on marketing alone—accounting for the largest share of treasury expenditure. This included $21 million on advertising: $10 million on sponsorships, $4.9 million on marketing and PR agencies, and $4 million on digital ads. Event-related costs totaled $7.9 million, including $4.5 million on events, $3.9 million on business development, and $3.2 million on media production. BlockBeats obtained receipts related to Polkadot’s marketing campaigns and reviewed its budget allocation for the first half of the year.

KOL Campaign Disaster: Fake Followers, Inflated Metrics, Bot Accounts

According to partial statistics published on Polkadot’s Marketing Bounty website, KOLs (Key Opinion Leaders) played a major role in Polkadot's marketing efforts, consuming over half of the total budget. Based on KPI data from content placements, these KOL campaigns appeared effective: over 15 million total views, more than 570,000 likes, and around 60,000 replies. The Q1 KOL promotion campaigns within the Polkadot ecosystem included four "Evox Promotion Campaigns" targeting North America and three "Lunar Promotion Campaigns" targeting Europe. Each campaign had an average KOL budget of about $300,000 and lasted approximately 30 days. The Evox campaigns involved roughly 30–40 KOLs per round, while Lunar campaigns involved significantly fewer—around 15. Additionally, there was a community account called Dot Army, which received a single payment of $15,000. However, after conducting an in-depth investigation into the actual quality of content based on the KOL lists, BlockBeats found that most of these so-called "Content Creators" were essentially exploiting the system. Many KOLs faked metrics related to follower counts, promotional content, and engagement, resulting in inflated costs. For example, the X user @DeFiExpertise has only 25 followers, yet their YouTube channel boasts over 70,000 subscribers. Upon inspection, the channel has posted fewer than 10 videos and is less than three months old. Calculating from the upload date of the first video, the channel’s creation or activation time aligns exactly with the start of the corresponding Evox campaign. Another KOL, @CriptoMindYT, has 12,000 followers but shares almost no overlap with typical crypto Twitter users’ follow lists. A closer look reveals that most of their followers are bot accounts. Moreover, this account exclusively promotes Polkadot as a “custom KOL,” publishing nearly only Polkadot-related content. Aside from retweeting content from Polkadot Army and official Polkadot accounts, most of their tweets receive only about 200 views. The operational style and content of @SharkyCoins are nearly identical to those of @ApeCryptos—they post dozens of meaningless short messages daily and frequently retweet each other, raising suspicions that both may originate from the same bot farm. Similarly, @MaxGanes specializes in mass-producing tweets, having published over 100,000 tweets and generating nearly 20 AI-generated, illogical posts per day. Some KOLs promote 20–50 different projects in a single tweet under the guise of perpetual profit-making. There are also numerous “one-time-use” KOLs. For instance, accounts like @DegenHardy and @TheCrypomist, listed in April’s KOL roster, have since been deactivated by the time of writing. Others, such as @CryptoEmily, have simply changed their names. The separately itemized “DOT Army” budget is particularly interesting. It includes one “official community account” and a package of about 30 KOL services, costing $15,000 per month. The Dot Army community account often posts tweets with extremely high view counts—for example, a June 30 tweet about a “DOT ETF” reached 110,000 views. However, clicking into the profile shows it has only around 200 followers. Further investigation reveals that these high-view tweets are consistently amplified by KOLs on the approved list. Among the KOL service package accounts, over 90% show the message: “None of the people you follow are following this account.” Beyond crypto Twitter, Polkadot also heavily invested in YouTube influencers. However, many of the YouTubers targeted do not align well with the crypto audience. For example, in the first half of the year, the German-language YouTube channel MilkRoad—whose content focuses broadly on investing and rarely touches cryptocurrency—was promoted. Most of its videos receive only hundreds of views, and Polkadot- and DOT-related content appears awkwardly inserted among unrelated topics, accumulating fewer than 500 clicks over four months. In May, Polkadot went even further by placing ads on Marvel Snap gaming channels, completely unrelated to crypto. The invoice justification? “Precisely targeted high-net-worth audience.” Surprisingly, Polkadot’s governance and foundation seem unconcerned about inefficient KOL spending. After completing Q1 KOL campaigns, they actually increased the KOL budget for Q2. From May to June, individual KOL campaign budgets reached up to $600,000. That said, the new promotional plans submitted to governance did include more detailed traffic evaluation metrics and requirements. It is also evident that Polkadot’s KOL spending is almost entirely focused on Western markets with large expenditures, while Asian market outreach remains virtually non-existent. BlockBeats previously reported in September last year that PolkaWorld, the Chinese-speaking Polkadot community, suspended operations for half a month after its official funding proposal was rejected. Around that time, Polkadot introduced its new OpenGov governance framework, but PolkaWorld argued that the new treasury management mechanism repeatedly denied funding requests from long-term contributors and organizations, forcing them to leave the ecosystem. Now it seems governance inefficiency might only be part of the problem.

“Logo Obsession” and “Media VIP” Culture

Besides KOL promotions, media placements and platform integrations also took up a significant portion of the budget, categorized on the Marketing Bounty site as “PR” and “website integrations.” Additionally, Polkadot appears to have some peculiar spending preferences—allocating exorbitant budgets in unexpected places, leaving observers puzzled. In media PR spending, The Block stands out immediately. Just a few research reports, sponsored articles, and one dashboard maintenance cost $138,000—including a $12,000 “management fee.” Other outlets like Decrypt, Defiant, and Cryptoslate were bundled into PR packages managed and billed by a governance entity named Community Project, which charges a 10% management fee. Each PR push costs around $150,000. Some PR campaigns were directly funded through Community Project with specific deliverables: 75 articles and 18 multi-channel content distributions for $100,000. Meanwhile, Chainwire received $150,000 in PR fees without any clearly defined services rendered. Polkadot also appears obsessed with logo placement. It paid substantial amounts to secure exclusive animated logo displays on two major crypto price tracking sites: Coingecko and Coinmarketcap. Six months of exclusive dynamic logo display on Coingecko cost $50,000, while Coinmarketcap charged nearly $480,000 for two years of dynamic logo display plus management fees—twice the unit cost of Coingecko. While users did notice these changes, the impact on DOT’s actual appeal was negligible. Two months ago, someone asked on X: “Why does only Polkadot’s token logo turn into pink flames on Coinmarketcap?” The top comment replied: “So what? Would you buy a token just because of a GIF?” Logo placement in podcasts was also extravagantly funded—two podcast series spent $110,000 for just eight episodes. Beyond these “standard channels,” we found baffling entries in Polkadot’s budget. For instance, using a PR intermediary firm Future, $20,000 was spent to increase brand awareness on Tom’s Hardware, a PC hardware website. Another budget line allocated $180,000 to print Polkadot logos on private jets across Europe, described as “six months of continuous logo exposure across a fleet of European private aircraft,” justified as “highly targeted branding and awareness-raising for high-spending individuals.” In comparison, ad placements at Singapore and Zurich airports seem relatively reasonable—but still expensive. A single billboard in one terminal at Singapore Airport cost $189,000. These inflated prices extend to event sponsorships. At a recent Web3 event in Vietnam, Polkadot paid $50,000 in sponsorship fees. By contrast, Ethereum’s platinum sponsorship at EDCON in Montenegro also costs around $50,000—but includes the opportunity to meet Vitalik in a VIP room. Interestingly, since Polkadot’s payments are mostly made in DOT, but recipients typically price services in USD, the volatility of DOT’s value leads to frequent “price adjustment” entries in the budget—often amounting to $100,000.

KOLs Inflate Metrics and Cash In—Have You Considered This Business?

Is Polkadot really that naive? Anyone can see these are obvious scams, yet Polkadot keeps blindly paying. As Odaily reported yesterday, the Polkadot community believes “the greatest value of Polkadot lies in its treasury.” Indeed, in terms of project operations and marketing, the crypto space is no stranger to such practices. Regarding Polkadot’s sky-high budgets, rumors circulate in the community about “whales draining the treasury.” While unproven, there are precedents in decentralized governance projects where actors exploit loopholes to extract value from treasuries. When researching the Nouns community, Lüdong discovered cases where members gained approval for highly priced, low-value promotion proposals by currying favor with DAO founders and major Nouns holders. In the RookDAO case, arbitrageurs directly bought large quantities of tokens to control the protocol treasury, staging a crypto version of the “Baowan battle.” “There may be backroom deals between KOLs and foundations or team members—this has existed since the previous cycle,” an insider in crypto marketing told BlockBeats. While large projects like Polkadot usually go through public governance, smaller project foundations often consist of just a few people, with decisions made directly by the CEO—leaving ample room for manipulation. In Polkadot’s case, however, executing such secret transactions individually seems difficult, as proposals, voting records, and disbursements are all publicly visible. Still, nothing stops governance itself from making foolish decisions—after all, today’s Twitter-centric marketing landscape is full of scams and opportunists. Take the KOL account mentioned earlier—it appears flawless in terms of follower count, view numbers, and engagement. Without checking the follow list, ordinary users would hardly detect it’s a batch-created fake account. “These accounts usually come from studios that write scripts and mass-produce them, carefully inflating views, replies, and likes,” a former employee at a KOL studio told BlockBeats. With AI tools now available, distinguishing real from fake KOL content has become even harder. Yet sometimes, small projects resorting to outsourcing is born of necessity. According to industry practitioners, when small teams negotiate with top-tier KOLs, either the KOLs aren’t interested or demand unreasonable prices, making deals hard to close. Moreover, information spreads quickly among KOLs—once one agrees to a deal, others soon learn of it and demand the same rate. To achieve visibility during a TGE, a project needs at least 100–150 KOLs. Without sufficient resources, negotiations easily collapse, leaving outsourcing as the only viable option. But solutions exist. Jesse (@Jessethecook69), who specializes in KOL marketing, told BlockBeats that many successful projects didn’t rely on KOLs early on. Instead, they focused on building genuine communities, achieving strong organic growth. Projects can also manually audit KOL performance—the most effective method being inspecting followers and comment sections for bot activity. “Or work with reputable agencies. Mainstream media and top KOLs often have verified KOL networks, transparent pricing, and won’t rip you off,” Jesse said. But whether one *can* detect fake accounts and whether one *wants* to are two different things. An insider told BlockBeats that the KOL-to-foundation reporting chain operates on upward accountability. PR firms or KOL studios deliver polished performance reports to project teams or foundations, who then use them to prove to VCs that they’re “still active.” Actual campaign effectiveness is rarely part of accountability frameworks. In some cases, after hiring an APAC marketing lead, the foundation ends up re-outsourcing the work to studios that produce falsified reports. “Sometimes, fabricated data from fake accounts looks better *and* cheaper than real results. So if a manager hires legitimate KOLs and delivers honest but mediocre data, they might have to explain why their metrics don’t look as good as others’.” “Many project teams don’t want to do real work—they just want to siphon funds from the treasury. I know of projects that only started looking for PR help after exchanges threatened to delist them. But they don’t care about real outcomes—legitimate expenses let them extract funds without getting caught,” said an informed practitioner. Often, KOL campaigns are merely tools for draining treasuries. Sometimes, KOL quotas are even dictated by investment VCs. “Exchanges, retail investors, and even fund LPs end up footing the bill. Though of course, LPs don’t mind losing a little money.” From VC-driven sky-high FDV valuations to project teams’ extravagant marketing budgets, many longstanding issues in the crypto market have recently converged amid the bear market. Jesse told BlockBeats that responsibility often doesn’t lie with individuals: “Not everyone intends to act maliciously—rather, the system is too flawed, creating incentives for exploitation.” Clearly, the market is entering a correction phase. This may not be a bad thing. Only by bursting the bubbles can we lay the groundwork for the next bull run.

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Who received Polkadot's $40 million in marketing expenses?

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