# Discussions on improving the current treasury spending/management mechanism **URL:** \ **Category:** Governance\ **Tags:** treasury\ **Created:** [March 7, 2023, 6:47pm UTC](https://forum.polkadot.network/t/discussions-on-improving-the-current-treasury-spending-management-mechanism/2252 "2023-03-07T18:47:50Z")\ **Posts on this page:** 1\ **Showing post:** 17
**Author:** ![GabrielJ](https://dub1.discourse-cdn.com/flex005/user_avatar/forum.polkadot.network/gabrielj/32/6811_2.png) [@GabrielJ](https://forum.polkadot.network/u/GabrielJ)\ **Post date:** [March 12, 2023, 4:25am UTC](https://forum.polkadot.network/t/discussions-on-improving-the-current-treasury-spending-management-mechanism/2252/17 "2023-03-12T04:25:54Z")
# The Problem Until now proposals have largely been **funded up-front** by the treasury. This has removed financial incentives for teams to deliver their projects and resulted in [multiple projects](https://kusama.polkassembly.io/post/2508) **never being delivered** , _with some teams disappearing in the process_. Proposers need to sell their KSM tokens upon receipt in order to protect their ability to deliver. With treasury payouts happening in one lump sum (sometimes several $100k), proposers reported having **difficulty liquidating** the KSM to FIAT (Euro, USD etc.) or stable coins. A sale event of a large amount of tokens puts **downward** pressure on the KSM **price** , thus harming token holders. # The Solution: Payout bounties We need to do better at **protecting** the treasury, make it **easier** for proposers to liquidate their funds and **limit** price impacts of the selling event. All while **incentivising** continued and effective **communication** from the proposers to the community along their journey. > The idea of the payout bounty was born in the direction channel as members of the community were brainstorming on a solution to the above mentioned problems (_Credits to @Abdulbee_). ![](https://europe1.discourse-cdn.com/flex005/uploads/polkadot2/original/2X/4/4c103982994dbcc7fffb09e5f65fa4b5b82d6efb.png) Through this payout system, funds would move to a bounty **holding account** , as opposed to the proposer’s address directly, upon referenda approval by the community. These funds would then be **paid out gradually** by the bounty based on predefined milestones. ## How this looks in practice When creating a referenda, proposers include a preimage. The preimage is the code to be executed when a referenda is approved. * * * _Status quo:_ Currently this preimage includes one token transfer transaction from the treasury to the **proposer’s address**. _Payout Bounty:_ For proposals to be processed through the payout bounty, this transfer transaction would go **to** the **bounty’s address**. Should a proposer seek to get an **upfront payment** , they would include **two transfer transactions** in the preimage. One transaction for the amount paid upfront to their wallet and a transaction for the remainder to the bounty address. ## The value of curators Curators design **reporting standards** and **required tooling**. Their focus at every step of the way should be to make communication between projects and token holders **more frequent and efficient**. Overall curators are **incentivised** to ensure the **successful completion** of all projects moving through it. Ideally they are well connected members in the community that are able to **drive collaboration** with other ecosystem projects to overcome obstacles for example. Curators should **report** to the community **on the bounty** itself and provide clear overviews on the projects moving through it, which step each project is at, obstacles encountered by projects, funding surplus/deficit etc. ## Effects on the different Stakeholders **Advantages for Token Holders** - Risk of approving proposals limited to funds asked up front - More successful completion of projects - Reduced downward price pressure through smaller token selloffs - Frequent reporting on project progress & roadblocks - More oversight into treasury spends - More accountability by proposers **Advantages for Proposers** - Smaller payouts = Easier conversion - Guaranteed USD equivalent payments at each milestone - Higher chance of proposal approval by token holders - Support + guidance by curators - Access to curators networks A **disadvantage** of the concept is the **trust** imposed on the **curators**. A significant amount of money would be under their control. It is crucial that curators are **trustworthy** individuals and **independent** of one another. Furthermore it is vital the **community** maintain **oversight** of the bounty and all its operations. # Timeline ![](https://europe1.discourse-cdn.com/flex005/uploads/polkadot2/original/2X/f/fa9e6bd2b5af24edd5a0ad3f5780126953bd628a.png) The payout bounty is a **concept** that in a permissionless network can be **implemented by anyone** and everyone. **Competition** amongst multiple payout bounties should be **encouraged**. This gives token holders more choice between different payout bounties with varying value adds and would help us allocate resources more efficiently as a network. Community would guide each proposal to the payout bounty they deem most appropriate for it. Everyone wishing to express their interest in a candidacy as a curator is invited to do so [in this post](https://kusama.polkassembly.io/post/2528). --- _[View the full topic](https://forum.polkadot.network/t/discussions-on-improving-the-current-treasury-spending-management-mechanism/2252)._