---
title: Proposal to Fund System Parachain Collators (Polkadot)

---

# Proposal to Fund System Parachain Collators (Polkadot)

## Table of Contents

- [1.0 Introduction](#10-introduction)
- [2.0 Previous Referenda](#20-previous-referenda)
- [3.0 Budget](#30-budget)
- [3.1 Payment Periods and Summary](#31-payment-periods-and-summary)
- [3.2 Collator Incentives](#32-collator-incentives)
- [3.3 Local Virtual Machines](#33-local-virtual-machines)
- [3.4 Administrative (Curators & Coordinator)](#34-administrative-curators--coordinator)
- [4.0 Collator Set Categorization (from March onward)](#40-collator-set-categorization-from-march-onward)
- [5.0 References](#50-references)

---

## 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.

- Referendum 156: Polkadot System Parachain Collators - Tips (Aug 2023)
https://polkadot.subsquare.io/referenda/156

- Referendum 288: Polkadot System Parachain Collators - Tips Q4/2023 (Sep 2023)
https://polkadot.subsquare.io/referenda/288

- Referendum 363: Funding of Polkadot System Parachain Collators (Dec 2023)
https://polkadot.subsquare.io/referenda/363

- Referendum 1006: Proposal for Top-Up for Funding of Polkadot System Parachain Collators (Jun 2024)
https://polkadot.subsquare.io/referenda/1006

- Referendum 1395: Polkadot System Parachains Collator Bounty #32 Top-Up Proposal - Jan/2025 (Jan 2025)
https://polkadot.subsquare.io/referenda/1395

---

## 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 through December (10 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 **$250/month per curator** (3 curators = **$750/month**)
- Coordinator compensation is **$1,000/month**

---

### 3.1 Payment Periods and Summary

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

- Collators: **64 × $200/month**
- Curators: **$250/month × 3 curators = $750/month**
- Coordinator: **$1,000/month**
- No staking rewards

**Monthly total (Jan; same for Feb):**

| Item | Basis | USD / month | DOT / month |
|---|---|---:|---:|
| Collators | 64 × $200 | 12,800.00 | 9,463.26 |
| Curators | $250 × 3 | 750.00 | 554.50 |
| Coordinator | fixed | 1,000.00 | 739.34 |
| Hosting | fixed | 425.00 | 314.21 |
| **Total / month** | | **14,975.00** | **11,071.31** |

**Jan + Feb total:** **$29,950.00** | **22,142.62 DOT**

---

#### B) March through December (10 months — revised tiered set)

From March onward:
- Collators: **38 funded collators × $250/month** (invulnerables only; see Section 4.0)
- Curators: **$250/month × 3 = $750/month**
- Coordinator: **$1,000/month**
- No staking rewards

**Recurring monthly total (March onward):**

| Item | Basis | USD / month | DOT / month |
|---|---|---:|---:|
| Collators | 38 × $250 | 9,500.00 | 7,023.51 |
| Curators | $250 × 3 | 750.00 | 554.50 |
| Coordinator | fixed | 1,000.00 | 739.34 |
| Hosting | fixed | 425.00 | 314.21 |
| **Total recurring / month** | | **11,675.00** | **8,631.56** |

**Totals (March through December):**

| Period | USD | DOT |
|---|---:|---:|
| **Total (10 months)** | **116,750.00** | **86,315.60** |

---

### 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 **38 funded collators** total for Polkadot system chains. The fee of $250/mth comprises of fees to compensate collators for a host machine, operator time, a portion towards tooling, monitoring and alerting.

---

### 3.3 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**

---

### 3.4 Administrative (Curators & Coordinator)
**Curators** oversee the bounty and are responsible for:

- Running the block-author scraping tool each payment period to determine collator performance
- Cross-checking tool output for correctness before executing payouts
- Reporting any bugs or anomalies in the tool output to the coordinator
- Executing proportional payouts via the 2-of-3 multisig based on verified results
- Curating a diverse and decentralized collator set within the available funding, accounting for differences in operator costs by geographic location

Curators are compensated at a fixed monthly rate:
- **$250/month per curator**
- 3 curators = **$750/month**

The **coordinator** provides technical support to the curators and collators:

- Answering technical questions from curators and collator operators
- Developing and delivering the script/tool used to check operator performance
- Maintaining and updating the tool as chains evolve (upgrades, new system chains, runtime changes)
- Supporting operational coordination such as onboarding new chains, managing required upgrades, and gathering logs or diagnostics for developers

Coordinator compensation:
- **$1,000/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 **38 collators total** on Polkadot.

### Tier model (minimums)

- **Tier-1 chains (AssetHub, People, BridgeHub, Bulletin):** 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 |
| Bulletin | Tier-1 | 8 |
| Coretime | Tier-2 | 4 |
| Collectives | Tier-3 | 2 |
| **Total** | | **38** |

---

## Budget totals (entire ask)

| Period | USD | DOT (@ $1.3526/DOT) |
|---|---:|---:|
| Jan + Feb (2 months) | 29,950.00 | 22,142.62 |
| March – December (10 months) | 116,750.00 | 86,315.60 |
| **Grand Total** | **146,700.00** | **108,458.22** |

---

## 5.0 References

- [Validator & Collator operational costs](https://docs.google.com/spreadsheets/d/1LEVNVfXLlhCeuDknEqeVRAuEbMw52hvyVAjqZB0J9Wg/edit)
- [System Parachain Collators (Framework / Background)](https://docs.google.com/document/d/1H2T1Nx90HkSAYF_CaOPLG-o3LS7h_QAa2WLDdcSJMs0/edit)
- [Economic Model for System Para Collators](https://forum.polkadot.network/t/economic-model-for-system-para-collators/1010)
- [Determine Collator node minimal performance requirement](https://forum.polkadot.network/t/determine-collator-node-minimal-performance-requirement/613)
- [Validator / Collator - Operational Costs (Polkassembly post #1980)](https://kusama.polkassembly.io/post/1980)
- [Kusama Staking Rates - discussion after referendum 238 (Polkassembly post #1899)](https://kusama.polkassembly.io/post/1899)
- [System Parachains Collator Bounty (Kusama Bounty #20)](https://kusama.polkassembly.io/bounty/20)
- [System Parachain funding (Bounty proposal doc)](https://docs.google.com/document/d/14pRUj8WZPO75DuwDl4HoZU97v_Rmfx0bZ2KFqFW-qkE/edit)
- [RFC-0007: System Collator Selection (GitHub)](https://github.com/polkadot-fellows/RFCs/blob/7eb2193a1a82818c83be4501c4b2a1e6d343dedb/text/0007-system-collator-selection.md)
- [RFC-0007: System Collator Selection (Rendered)](https://polkadot-fellows.github.io/RFCs/approved/0007-system-collator-selection.html)