Partnered With:

Kusama Treasury running out? How to improve the sustainability of Treasury funds?

Read this article in 11 Minutes

One of Kusama's verifier nodes, Adam Clay Steeber, created a buzz with a post on the Boca forum about how to improve the sustainability of Kusama's Treasury funds.

The Kusama Treasury Is Running Out? How to Improve the sustainability of the Treasury?

原文来源： PolkaWorld

Recently, Adam Clay Steeber, one of Kusama's verifier nodes, created a buzz with a post on the Boca forum about how to improve the sustainability of Kusama's Treasury funds. Many community members also expressed their concerns and made many suggestions. PolkaWorld collates some of the views below.

Kusama Treasury data analysis

Adam Clay Steeber quantified the problem by looking at the rate of Treasury spending over the past quarter. He queried the balance of the Treasury from blocks 16 million to 17,224,000 as follows:

He then performed a simple linear regression on the data to create a prediction graph:

According to the forecast, at the current rate of expenditure, the state Treasury will run out of KSM at around 20,600,000 won, meaning this will happen around mid-to-late November 2023. Here are some key numbers from the forecast:

Average revenue per block = 0.0166 KSM

Average cost per block = 0.1134 KSM

Average net worth per block = -0.0968 KSM

To avoid that, or better manage the use of the Treasury. Adam Clay Steeber has proposed reconfiguring the parameters of the spending track to limit the network's simultaneous broadband handling of spending referendums, and hopes to strike a balance between profligacy and excessive frugality.

So he proposed the following reprieve, giving the Treasury an extra eight months.

Comparison of the current trajectory (red) with Adam's proposed trajectory (green)

If we manage to stay on this trajectory, the Treasury will run out around $24,000,000, which would happen around early to mid-July 2024. Some of the important numbers for my trajectory are:

Average cost per block = 0.0650 KSM

Average expenditure per disbursement period (every 6 days, assuming the same income) = 5,615.965 KSM

Parameter change suggestion

Adam proposed a reconfiguration of the following parameters. In general, Reduce the 6 expenditure categories in the previous Treasury referendum (Treasurer, Small Tipper, Big Tipper, Small Spender, Medium Spender, Big Spender) to 3 Four categories (Treasurer, Tipper, Spender) and reduced the number of referendums conducted at the same time.

The following actions are also recommended:

Changing this value in the runtime from 6 to 0 stops sending money from the Treasury to the Society.

Change the other expenditure tracks to a maximum expenditure of 1 * QUID and rename them to include deprecated metrics (such as deprecated_medium_spender), effectively disabling them and preventing them from being used accidentally.

If the ecosystem fails to convert large amounts of Treasury funds into stable assets by 2024, we transfer 120k KSM from the Society to the Treasury via the root track.

PolkaWorld Note: Society refers to a special organization on the Kusama network, which is a decentralized autonomous organization that aims to bring community members together for various tasks and projects. Members of the Society can receive financial support, reputation, and other incentives to encourage them to contribute to the Kusama ecosystem.

In addition, there is already an OpenGov 145 referendum in the Kusama network that aims to transfer 120k KSM in Society to the state Treasury via the root track, which is currently under discussion with 8% in favor and has not yet entered the decision period.

Q& A

1. How will these changes stop unsustainable spending?

Adam: Reduce the number of spending referendums that are in the process of being decided at the same time, thereby limiting the rate at which the Treasury can actually spend money. Usually, the expenditure referendum with 14-day decision cycle needs 10-14 days to be confirmed (about 2 expenditure cycles), so we can expect the maximum non-treasurer expenditure of each expenditure cycle to be 6,000 KSM, which is only about 7% more than the trajectory I suggested. We have retained a stricter Treasurer track for large outlay in exceptional circumstances.

2. What happens when multiple referendums qualify to begin the decision period, but only one is allowed to proceed?

Adam: The AYE first-past-the-post referendum has been moved to a decision period. This is a good way to ensure that the spending referendums that are most needed begin to enter the decision period first.

3. Why are these changes needed?

Adam: There are very few hard limits on how much you can spend during this period, and the blind thinking of the KSM holders is really bad when it comes to budgeting in our current situation. If we continue on our current course, I expect the Treasury to run out of tens of thousands of KSMS sometime this fall, at which point all disbursements will be rejected by token holders.

In terms of effectively managing expenditure, nothing is more effective than limiting the expenditure bandwidth of gov2.

4. How do we implement these changes?

Adam: Check out the Github branch I made compared to release-v0.9.40. Please feel free to give your suggestions.

While I'm not an expert on devops, or on set.code extrinsic on Kusama, changing the gov2 track in code is pretty straightforward. However, I don't think we can rely on Parity to merge these changes. I know that there are technical wizards in the community willing to help translate these changes into a runtime upgrade referendum on the root track. In essence, if we want to stop bleeding money from Kusama Treasury, we need to do it ourselves.

So we need: a whale of a root decision deposit, a technical guide to prepare for the referendum.

I am open to suggestions and feedback on my changes on Github. Let me know if I've got version control wrong or if I've missed any necessary configuration.

If you have research on this topic and would like to offer your advice, feel free to contribute to the Kusama network by leaving a comment here! https://forum.polkadot.network/t/kusama-treasury-analysis-reconfiguration/2484