What Is The Polkadot Treasury?

By Taaza Facts

Published on:

What Is The Polkadot Treasury?

The Polkadot Treasury is a pot of funds collected via transaction fees, block production rewards, slashing, and staking inefficiencies. These funds are held in a system account accessible only by the system internal logic. 

The Polkadot Treasury

Polkadot’s on-chain Treasury has the potential to revolutionize how individuals do business and collaborate over shared goals. It brings the financial agency once solely reserved for governments and corporations to a decentralized peer-to-peer network. The Treasury can be used to fund any project or activity that benefits the Polkadot ecosystem. These include cross-chain application development, infrastructure development and continued operation, ecosystem provisions, marketing activities, software development, research, community events and outreach, and network security operations. 

How Are Treasury Inflows Determined? 

Several mechanisms determine token deposits into the Treasury. 

  • Slashes – When validators or nominators are slashed on Polkadot, a small portion of the slashed tokens is redirected to the Treasury. Slashes are infrequent events in the Polkadot ecosystem. 

  • Transfers – Funds can also be directly sent to the Treasury. However, like slashes, this is also a rare event and generally occurs because grantees reimburse some of the tokens allocated to them. The reasons behind the reimbursement could vary. 

  • Transaction Fees – 80% of the transaction fees of each submitted extrinsic are redirected to the Treasury, while the remaining 20% is given to block producers. 

  • Staking Inefficiencies – The Polkadot network uses a parameter called the ideal staking rate. Every time the actual staking rate is not equal to the ideal staking rate, the APY for stakers decreases. To keep the inflation rate constant at 10%, a share of the overall reward for stakers is diverted to the Treasury. 

How Are Treasury Outflows Determined?

Outflows from the Treasury are determined using the following mechanisms. 

  • Burned tokens – At the end of every spend period, 1% of the available tokens are burned. 

  • Tips – Smaller payouts to grantees. This generally happens within a spend period. 

  • Treasury Proposals and Bounties – Treasury proposals and bounties account for the largest share of outflows and must be approved via governance. Once approved, payouts can occur at the end of a spending period. 

Submitting A Treasury Proposal 

Let’s look at how to submit a proposal. Proposers can put together a project plan and budget. They can then garner feedback from the Polkadot community. If community feedback is positive, they can submit a proposal as an on-chain referendum. The steps below outline how to submit a Treasury proposal. 

  • Begin The Conversation – Ask the community for feedback regarding your proposal idea. 

  • Draft The Proposal – The next step is to draft your proposal. Your proposal must have a clear goal or address a specific problem. It should also explain how it would reach its goal and whether it would require ongoing maintenance. To simplify things, itemize the tasks that must be completed so that fees can be evaluated and important milestones followed. 

  • Revise Proposal – Revise your proposal based on the feedback received from the Polkadot community. 

  • Submit Proposal – If your proposal receives positive feedback from the community, you can submit it on-chain as an OpenGov referendum. 

You can also submit other types of proposals, such as bounty proposals and tips. 


The Polkadot Treasury currently operates on a single account on-chain. Funds in the Treasury are managed by six Treasury tracks: Treasurer, Big Spender, Medium Spender, Small Spender, Big Tipper, and Small Tipper. Sub-Treasuries allow having Treasury accounts that correspond to each collective a possibility. This means the Polkadot Treasury can allocate funds to a sub-Treasury, allowing the respective collective to spend the funds according to their specific rule set.

Funded Projects 

Some of the projects funded by the Treasury are P2P hosting network by DatDot, Go Substrate RPC Client by Centrifuge, Node Infrastructure by OnFinality, Node infrastructure by Pinknode, Substrate explorer by Polkastats, and many more. The full list of funded projects is available on the Polkadot website.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Taaza Facts

I am a multifaceted content creator with expertise in blogging, Finance, and Cryptocurrency reviews. My creative journey involves weaving captivating stories in blogs, designing aesthetically pleasing and functional websites, and dissecting the nuances of cinema. We are dedicated to sharing our passion and insights with a global audience.

Related Post

BlockDAG On The Brink Of Earning $5M Daily From Presale; Outshines Arbitrum’s TVL Growth And Bitget Token’s Rally

Amid the cryptocurrency market’s revival, both Arbitrum and Bitget Token are experiencing growth, with Arbitrum’s Total Value Locked (TVL) climbing to $3.103 billion and Bitget Token ...

Altcoin Outlook: Analysts Forecast 3 Potential Breakouts Amid Market Bloodbath

As the market takes a downturn, experts eye specific altcoins poised for significant growth. Despite widespread challenges, these tokens show promise to surge. Analysts highlight three ...

Polkadot Timeline: A History of Polkadot

Polkadot is an incredibly unique open-source shared multichain platform that connects and secures a network of blockchains. Often referred to as an “Ethereum killer,” this blockchain ...

Don't Miss the Boat: Top Altcoins Expected to Soar in the Upcoming Altseason!

The market is buzzing with excitement as altseason kicks into high gear. With the bull run of 2024 already in motion, attention is shifting to promising ...

Leave a Comment

Actor John Abraham Purchases Bungalow In Mumbai For Rs 75.83 Crore Ankita Lokhande: From TV Stardom to Bollywood Dreams | Inspiring Journey Ayesha Khan Lifestyle, Bigg Boss 17 Wild Card, Boyfriend, Family, Munawar faruqui, Age, Biography Kalki 2898 AD – 100 Times Bigger Than Salaar Prabhas Film Bigg Boss 17: Salman Khan scolded Ayesha badly, got angry on Munawar-Ayesha matter