Dear Polkadot community,

Collators on System Parachains are provided with minimal rewards for block production and small incentives in terms of transaction fees. This reduces incentives for Collators to act in a favorable manner and they may also be inclined to under-resourcing their hosts to save costs. Collators should receive funding for the provision of their services. Ultimately, this should be provided by the chain in a preferably sustainable manner. Implementation of such a system is a long-term solution. In the medium term, funding for collators can be provided by the respective Treasuries in the form of a bounty. This allows funding to be pre-allocated and independently managed.

This proposal is the final monthly operating costs payment for service providers in Q4 2023. The previous 2-month operation tip was approved under [Referenda #156](<156>). Future cost compensation will be done under the [Polkadot System Parachain Collators Bounty](https://polkadot.polkassembly.io/post/1994) starting from January 2024.

**[Full Proposal](<https://docs.google.com/document/d/1kqrgespOFcwh_uaOfv1RtwY64D7sE3luCkfSd09WXzs/edit?usp=sharing>)**

The proposal aims to secure 7,289.03 DOT for Collators on the Polkadot System Parachains network for services delivered for 3 months - 10-12/2023.

![](https://i.ibb.co/LnB6pJN/Screenshot-2023-11-21-at-13-48-15.png)

We encourage the Polkadot community to review this proposal and provide any feedback or suggestions.

Thank you!



- **Problem Statement:** Collators on System Parachains lack adequate rewards, leading to under-resourcing and reduced incentives.
- **Significance:** Insufficient rewards may impact Collators' behavior negatively.
- **Proposed Solution:** Monthly operating costs payment for Collators in Q4 2023, transitioning to a bounty system in 2024.
- **Expected Outcomes:** Securing 7,289.03 DOT for Collators on Polkadot System Parachains for services provided from 10-12/2023.

Requested: 0.71 undefined

#536 Polkadot System Parachain Collators - Tips Q4/2023