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SPC_Topup-012026-Polkadot.md

Proposal to Fund System Parachain Collators (Polkadot)

Table of Contents

1.0 Introduction

Polkadot’s system parachains provide shared infrastructure that other applications and users implicitly rely on. To keep these chains healthy, the network depends on collators that are sufficiently decentralized, consistently available, and properly resourced—because poor collation performance directly translates into slower block times and degraded UX.

This proposal updates the budget and scope of the existing System Parachain Collator bounty top-up to reflect current treasury constraints. It includes:

  • payment for work already rendered (at reduced rates for Jan/Feb), and
  • a revised, lower-cost funded set from March onward based on a tiered approach (invulnerables only).

2.0 Previous Referenda

Initiatives supporting Polkadot system chain collators have been ongoing since 2023 and have been essential to maintaining the network’s stability, security, and decentralization.

3.0 Budget

Conversion rate used: $1.3526 per 1 DOT
Note: This budget is structured in two parts:

  1. January + February payments for work already rendered (reduced rates)
  2. March + 5 additional months under the revised, tiered collator set and updated cost model

Important policy updates:

  • No payments to permissionless collators
  • No staking rewards
  • Curator compensation is now modeled as $20/hr × 15 hrs per chain per curator
    (equivalent to $300/month per curator; 3 curators = $900/month)
  • Coordinator compensation is modeled as $42.50/hr × 20 hrs = $850/month
  • Hosting is fixed at $425/month
  • Tool development is a one-time $4,250 per chain (added once in March)

3.1 Payment Periods and Summary

A) January + February (work already rendered — reduced rates)

  • Collators: 64 × $200/month
  • Curators: $20/hr × 15 hrs × 3 curators = $900/month
  • Coordinator: $42.50/hr × 20 hrs = $850/month
  • Hosting: $425/month
  • No staking rewards
  • No tool dev

Monthly total (Jan; same for Feb):

Item Basis USD / month DOT / month
Collators 64 × $200 12,800.00 9,463.26
Curators $20/hr × 15h × 3 900.00 665.39
Coordinator $42.50/hr × 20h 850.00 628.42
Hosting fixed 425.00 314.21
Total / month 14,975.00 11,071.27

Jan + Feb total: $29,950.00 | 22,142.54 DOT

B) March + 5 additional months (6 months total — revised tiered set)

From March onward:

  • Collators: 30 funded collators × $300/month (invulnerables only; see Section 4.0)
  • Curators: $900/month
  • Coordinator: $850/month
  • Hosting: $425/month
  • Tool dev: $4,250 one-time in March only
  • No staking rewards

Recurring monthly total (March onward):

Item Basis USD / month DOT / month
Collators 30 × $300 9,000.00 6,653.32
Curators $20/hr × 15h × 3 900.00 665.39
Coordinator $42.50/hr × 20h 850.00 628.42
Hosting fixed 425.00 314.21
Total recurring / month 11,175.00 8,261.87

One-time (March only):

Item USD DOT
Tool development 4,250.00 3,142.10

Totals (March + 5 months):

Period USD DOT
Recurring (6 months) 67,050.00 49,571.20
Tool (one-time, March) 4,250.00 3,142.10
Total (6 months) 71,300.00 52,713.29

3.2 Collator Incentives

January + February (legacy set; reduced rates)

This portion covers work already rendered for the current set, at $200/month per eligible collator, paid proportional to blocks authored.

March onward (new tiered set; invulnerables only)

From March onward, funding is limited to invulnerable community collators based on a tiered categorization (Section 4.0), resulting in 30 funded collators total for Polkadot system chains. The fee of $300/mth comprises of fees to compensate collators for a host machine, operator time, a portion towards tooling, monitoring and alerting, together with the provision of a backup server.

3.3 Block Author Scraping Tool

Curators calculate proportional payouts by scanning each chain’s blocks over the assessment period, tallying blocks authored per collator, and distributing rewards based on each collator’s share of block production.

To ensure accuracy, the bounty operates under a 3-person, 2-of-3 multisig: each month, two curators independently run the process, compare results, and publish the final accounting before executing payouts.

A newer tool is already partially developed and currently being prototyped, using Rust for chain data extraction and Typescript for constructing on-chain extrinsics. Like its predecessor, the tool will be open-sourced for community review and independent verification.

One-time cost (March only): $4,250 (Polkadot portion).

3.4 Local Virtual Machines

We host local archive RPC instances in virtual machines on the same network as the curator’s scraping VM to ensure fast, reliable access to historical chain data. This is especially important for the relay-chain archive node, which has significantly larger storage requirements than individual parachain nodes.

The monthly VM costs cover not only compute and storage, but also ongoing maintenance activities including software upgrades, maintaining backups, and ensuring the nodes remain available and fully synced.

Archive access is also required for governance and auditability: curators may need to query historical state to validate or respond to claims based on past data. Under this proposal, retrospective queries are limited to 3 months back.

Monthly cost (Polkadot portion):

  • Parachain archive VMs: 5 × $50 = $250.00/month
  • Relay-chain archive VM: 1 × $150 = $150.00/month
  • Curator VM (50% share): $50 × 0.5 = $25.00/month

Total monthly infrastructure cost = $425.00

3.5 Administrative (Curators & Coordinator)

The Curators are responsible for producing the monthly payout report, reviewing results for discrepancies, communicating updates to the collation team, and handling incoming queries and follow-ups as they arise. Curators are compensated under a simplified hourly model:

  • $20/hr × 15 hrs per chain per curator
  • Equivalent to $300/month per curator
  • 3 curators = $900/month

System Parachain Collators are additionally supported by a coordinator who acts as the technical liaison between collators and curators. When discrepancies occur, the coordinator helps identify likely technical causes and flags any relevant chain events that could explain the outcome. The coordinator also supports operational coordination—such as onboarding new chains, managing required upgrades, organizing actions that must be performed in unison, and gathering logs or diagnostics for developers:

  • $42.50/hr × 20 hrs = $850/month

4.0 Collator Set Categorization (from March onward)

With assistance from Parity and based on chain criticality and risk profile, the system chains are categorized into tiers with minimum recommended collator counts. This provides a defensible, reusable model for future system chains while tightening costs under current treasury conditions.

Key outcome from March onward:

  • We fund invulnerable community collators only (no permissionless funding).
  • The funded set drops to 30 collators total on Polkadot.

Tier model (minimums)

  • Tier-1 chains (AssetHub, People, BridgeHub): 8 community invulnerables funded (dev invulnerables remain, but are not funded here)
  • Tier-2 chains (Coretime): 4 community invulnerables funded
  • Tier-3 chains (all other system chains e.g., Collectives): 2 community invulnerables funded

Reference: tier summary screenshot (attached in discussion thread).

March-funded collators (Polkadot)

Chain Tier Funded community invulnerables
AssetHub Tier-1 8
BridgeHub Tier-1 8
People Tier-1 8
Coretime Tier-2 4
Collectives Tier-3 2
Total 30

Budget totals (entire ask)

Period USD DOT (@ $1.3526/DOT)
Jan + Feb (2 months) 29,950.00 22,142.54
March + 5 months (6 months) 71,300.00 52,713.29
Grand Total 101,250.00 74,855.83

5.0 References

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