KSM trading recently went live on Hydration after referendum `#490` (https://kusama.subsquare.io/referenda/490) approved `33,333` KSM in Treasury LP. This has finally opened up liquidity flows between the two chains.

When transfers are made between the two using the Kusama <> Polkadot bridge, if a user does not have sufficient KSM/ DOT (depending on the chain) on the receiving network then a portion of the asset they’re sending (e.g. KSM from KAH to PAH) is swapped for the native token to pay for fees. This is excellent UX and prevents user frustration with having to collect fees before bridging assets - however, unfortunately the current liquidity leaves much to be desired and as a result users can get rekt by slippage and lose much larger amounts of their assets to fees than expected.

**This proposal, if approved, will supply `1,000` DOT to a `2/2` multisig with signers Leemo & lolmcshizz** - which combined with referendum `#503` (https://kusama.subsquare.io/referenda/503) on Kusama for `333` KSM, and will be split between Kusama AssetHub and Polkadot AssetHub `50/50` to provide a base level of liquidity on each network. This will ensure that there is sufficient liquidity for these small swaps and users will only pay the fees they are expecting to when making transfers.

*Any excess tokens will be returned to their respective treasuries.*

- **Problem Statement:** Inadequate liquidity between Kusama and Polkadot networks causing users to incur unexpected fees and losses during asset transfers.
- **Significance:** Insufficient liquidity leads to users experiencing slippage and higher fees than anticipated, impacting user experience and asset value.
- **Proposed Solution:** Allocate 1,000 DOT to a multisig for liquidity provision, split between Kusama and Polkadot AssetHubs to enhance liquidity for seamless asset transfers.
- **Expected Outcomes:** Improved liquidity will mitigate slippage, reduce unexpected fees, and enhance user experience during cross-chain asset transfers.

#996 Polkadot/ Kusama Asset Hub Liquidity for Bridge Fee Swaps

No Active Proposals