By Raul Romanutti, Polkadot Council Member
The Polkadot ecosystem is thriving. To make sure the teams building on the network have all the support they need, it is paramount that they understand the funding alternatives that are available. One good funding option is the Polkadot Treasury, which is already supporting a wide range of projects.
Although Polkadot only came to many people's attention since its launch in May this year, the ecosystem has been thriving for a long time: Since the development of Polkadot back in 2016, the protocol represents a significant step towards Dr. Gavin Wood’s vision of a decentralized internet. Teams building on Polkadot can now submit their projects to be funded by the Polkadot Treasury, which complements the Web3 Foundation Grants Program and aims to expand the community.
What is the Treasury?
The Treasury is a pot of funds collected through transaction fees, slashing and staking inefficiencies. One way of administering these funds is via a spending proposal, which can be initiated by any holder of DOT, Polkadot’s native token. If approved by the Council, which in this sense is in charge of guarding and administering these funds, after a short waiting period, community members can receive funding for the development of projects that give traction to the network.
To minimize storage on chain, proposals don't contain contextual information. When a user submits a proposal, they will first need to find an off-chain way to explain what it is about. The generally accepted way is to include a short description of the project with a link to the proposal as a discussion entry on the Polkassembly discussion forum and share this with Council members, along with a brief introduction in the Polkadot Direction channel. Once the proposal receives enough feedback from the Council, the proposer can submit on-chain, along with a deposit of 5% of the total submission or 100 DOT as an anti-spam measure (to be returned if the proposal is accepted). To learn more about how to create a proposal, visit the Polkadot Wiki.
Funds can also be used to tip community members for their work in different areas: Currently, funds are used to reward efforts such as translating documentation, writing Polkadot-related articles and various posts, supporting the Polkadot Telegram communities, producing educational videos and more! Tips can be suggested by anyone and are supported by members of the Council. Tips do not have any definite value: the final value is decided based on the median of all endorsements submitted by at least eight Council members.
The First Teams to Make On-chain History
Proposals may consist of (but are not limited to) infrastructure deployment and continued operations, network security operations, ecosystem provisions (collaborations with friendly chains), marketing activities (advertising, paid features, collaborations), community events and outreach, and software development (wallets and wallet integration, clients and client upgrades).
The first proposals submitted for Council review fell into the following categories: infrastructure deployment, continued operations projects, and software development proposals. Let's take a closer look at the teams that made history by submitting the first ever proposals to the Polkadot Treasury.
Redspot, the development environment, testing framework and asset pipeline for pallet-contracts: Named after Jupiter's Great Red Spot, the project aims to simplify testing and interacting with smart contracts on-chain. On the Polkadot network, it is likely that more than one parachain will deal with smart contracts deployment. The team behind Redspot, Patract Labs, provides solutions for Polkadot's parachain smart contract ecosystem. They support smart contract parachains in Polkadot's public blockchain network and smart contract consortium blockchains based on Polkadot's technology. The team's first group of proposals, including this one, focuses on simplifying developing, debugging, testing and deploying smart contracts.
Centrifuge and the Go Substrate RPC Client (GSRPC): The project, originally funded via a Web3 Foundation Grants Program in 2019, provides APIs and types around Polkadot and any Substrate-based chain RPC calls. Since its inception, it received a lot of attention from other projects in the Polkadot ecosystem and is used a lot. The fast development speed of Substrate requires regular upgrades of GSRPC: this proposal aims to use treasury funds to maintain the client for the next six months. To read more about this implementation, check the latest links on Polkassembly.
Polkascan and its essential infrastructure deployment project: Polkascan Foundation has been around from day one in the broader Polkadot ecosystem and has been consistently advocating the use of on-chain treasuries as a sustainable source of funding for ecosystem infrastructure components. In this particular proposal, Polkascan aims to fund the maintenance of their Python Substrate Interface Library, focused on interfacing with Substrate nodes, providing additional convenience methods to deal with SCALE encoding/decoding, metadata parsing, type registry management and versioning of types.
Encointer, the quest for self-sovereign identity: Encointer is a platform for self-sovereign identity and local community currencies with self-issued universal basic income. The fundamental element behind it is the unique-proof-of-personhood protocol which leverages the fact that a human can only be in one place at one time. Employing physical concurrent pseudonym key-signing parties, the team aims to bring self-sovereign identity to Polkadot. The team prototyped two live testnets, Gesell and Cantillon, and submitted a proposal to the Polkadot Treasury to integrate them as parachains and demonstrate SSI authentication through HRMP. We look forward to seeing the first results!
The Future of the Polkadot Treasury: A Few Hints
The Council, as guardian of the Treasury, attempts to fund as many proposals in the queue as it can without running out of funds. If the Treasury ends a budget period without spending all of its funds a percentage of them are burned: the current burn on Polkadot is 1%. In practice, this means a percentage of the treasury funds are taken out of circulation every 24 days unless they are used.
Besides reviewing spending proposals and endorsing tips, the Council is also responsible for finding new ways to allocate funds efficiently. New spending tools are continually being discussed by the community, and the next step on our roadmap is to add one more mechanism to the Treasury pallet: The Treasury Bounty mechanism. This aims to delegate the curation activity of spending proposals to an expert called a "Curator". This new mechanism, originally discussed in the context of Polkadot's wild cousin Kusama, aims to release the Council from the responsibility of monitoring and executing payments, delegating these tasks to experts who are much more suited to review and judge specific-topic projects.
Are you ready to submit a proposal to the Treasury and join the discussion? Read more about treasury spending mechanisms and how to submit a proposal on our Wiki. There are plenty of ways to get plugged in to the Polkadot community. Join the discussions on Telegram and Element. Learn more about Polkadot on our website and in the Polkadot Wiki. Want to join the core growth team behind Polkadot? Join the Ambassador Program.