The Treasury is a pot of funds collected through slashing. The funds held in the Treasury can be spent by making a spending proposal that, if approved by the Council, will enter a waiting period before distribution. This waiting period is known as the budget period, and its duration is subject to governance, with the current default set to 24 days. The Treasury attempts to spend 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 its funds is deducted and transferred to the Reward fund. This percentage is currently at 1%.
Anyone can become a proposer. When a proposer wishes to propose a spend from the Treasury, they must reserve a deposit of at least 5% of the proposed spend (It is configurable in the system). This deposit will be slashed if the proposal is rejected. It is considered an anti-spam measure, so the proposers need to take responsibility for their proposal. Otherwise, the deposit is returned if it is accepted.
Proposals may consist of (but are not limited to):
- Infrastructure deployment and continued operation.
- Network security operations (monitoring services, continuous auditing).
- Ecosystem provisions (collaborations with friendly chains).
- Marketing activities (advertising, paid features, collaborations).
- Community events and outreach (meetups, pizza parties, hackerspaces).
- Software development (wallets and wallet integration, clients and client upgrades).
The Treasury is ultimately controlled by the Council, and how the funds will be spent is up to their judgment.
Slashing: When a validator is slashed for any reason, the slashed amount is sent to the Treasury with a reward going to the entity that reported the validator (another validator). The reward is taken from the slash amount and varies per offense and number of reporters.
The proposer has to deposit 5% of the requested amount or 100.000 GLCH (whichever is higher) as an anti-spam measure. This amount is put into treasury if the proposal is rejected. These values are subject to governance so they may change in the future.
Please note that there is no way for a user to revoke a treasury proposal after it has been submitted. The Council will either accept or reject the proposal.
Create from app website:
- From the website, use either the extrinsics tab and select the Treasury pallet, then proposeSpend and enter the desired amount and recipient, or use the Treasury tab and its dedicated Submit Proposal button
- The system will automatically take the required deposit, picking the higher of the two values mentioned above.
- Once created, your proposal will become visible on the Treasury screen and the Council can start voting on it.
To minimize storage on the chain, proposals don't contain contextual information or metadata, so it's up to the proposer to create a description and purpose that the Council could study and base their votes on. When a user submits a proposal, they will probably need to find an off-chain way to explain the proposal.
Spreading the word about the proposal's explanation is ultimately up to the proposer - the recommended way is using official Element channels.
At this point, a Council member can create a motion to accept or reject the treasury proposal. It is possible that one motion to accept and another motion to reject are both created. The proportions to accept and reject Council proposals vary between accept or reject, and possibly depend on which network the Treasury is implemented.
The threshold for accepting a treasury proposal is at least three-fifths of the Council. On the other hand, the threshold for rejecting a proposal is at least one-half of the Council.