Jun. 10, 2025
Dear Securities and Exchange Commission, I strongly support Nasdaq’s proposed rule change (File No. SR-NASDAQ-2025-019) to list and trade shares of the Grayscale Polkadot Trust (DOT) under Nasdaq Rule 5711(d) for Commodity-Based Trust Shares. This proposal aligns with Section 6(b)(5) of the Securities Exchange Act of 1934 by promoting investor protection, preventing fraudulent and manipulative practices, and advancing the public interest through a regulated investment vehicle tied to Polkadot’s highly decentralized blockchain. Polkadot’s Decentralization and Nakamoto Coefficient: Polkadot’s decentralized architecture is a cornerstone of its resilience and security, making it an ideal candidate for a listed trust. The Nakamoto Coefficient, which measures decentralization by calculating the minimum number of entities needed to control over 33% of a proof-of-stake (PoS) network’s stake, underscores Polkadot’s strength. As per naka.io, Polkadot’s current Nakamoto Coefficient is 178, significantly higher than other leading blockchains (e.g., Solana at 21, Avalanche at 25, and Ethereum at approximately 2–10). This high coefficient, driven by Polkadot’s Nominated Proof-of-Stake (NPoS) mechanism and large validator set, reduces risks of collusion, censorship, and single points of failure, making Polkadot less susceptible to manipulation than its peers. OpenGov Governance System: Polkadot’s OpenGov system, launched on June 15, 2023, empowers DOT holders with direct, transparent control over the network’s evolution. Unlike centralized governance models, OpenGov relies on public referenda, where any DOT holder can propose and vote, with voting power weighted by stake and conviction. Key features include: Multiple Tracks and Origins: Proposals are categorized into 15 tracks (e.g., Small Tipper, Root) for simultaneous voting, ensuring agile decision-making. Multi-Role Delegation: Token holders can delegate voting to experts, balancing participation and expertise. High Participation: Referenda and votes have increased over 1,000% and 1,981%, respectively, since OpenGov’s launch, with treasury proposals up 405%, reflecting robust community engagement. This decentralized governance, involving 1.3 million DOT holders, minimizes manipulation risks and ensures no single entity controls the protocol. Alignment with SEC Goals: The Grayscale Polkadot Trust, backed by Coinbase Custody and priced via the CoinDesk DOT CCIXber Reference Rate, offers secure, regulated exposure to DOT. Polkadot’s Nakamoto Coefficient of 178 and OpenGov’s transparent governance enhance network security and investor protection. Nasdaq’s surveillance under Rule 5711(d) further mitigates market abuse risks. Listing the Trust would meet investor demand for crypto exposure, following Bitcoin and Ethereum ETF precedents, while leveraging Polkadot’s superior decentralization. I urge the SEC to approve SR-NASDAQ-2025-019, supporting fair markets, investor access, and Web3 innovation. Please direct future correspondence to: [REDACTED]. Sincerely, Shashank Rai