Community Treasuries

Every Encointer community has a treasury — a technical account that holds funds on behalf of the community. The treasury is not controlled by any private key; instead, funds can only be spent through democratic proposals approved by the community's reputables.

How treasuries work

Treasury accounts

Each community's treasury address is deterministically derived from the community identifier. No person or entity holds the private key. This means funds sent to the treasury can only be moved by on-chain democracy — there is no backdoor.

Funding

Treasuries can receive funds from:

  • Direct transfers (donations from individuals or organizations)
  • A share of network fees (planned for the future)
  • Faucet drip fees (planned for the future)

Spending

Community members propose spending through democracy proposals. Available spending actions:

  • Spend native — Transfer native tokens (KSM on mainnet, ERT on testnet) from the treasury to a beneficiary
  • Issue swap native option — Grant someone the right to exchange community currency for native tokens from the treasury at a specified rate
  • Issue swap asset option — Grant someone the right to exchange community currency for XCM-transferable assets from the treasury

All spending proposals must pass the community's democratic vote before enactment.

Swap options

Swap options are a mechanism for communities to compensate service providers, fund projects, or incentivize participation using treasury-held assets.

A swap option grants an individual the right (but not obligation) to exchange community currency for treasury assets at a specified exchange rate. Parameters include:

  • Allowance — Maximum amount of native/asset tokens that can be exchanged
  • Rate — Exchange rate (CC per native/asset token)
  • Burn — Whether the CC paid is burned or sent to the treasury
  • Validity window — Optional time bounds (valid_from, valid_until)

When the option holder exercises their option, they pay the equivalent CC amount and receive native/asset tokens from the treasury. The option's remaining allowance decreases accordingly.

Tutorial

See the Community Treasury Spending tutorial and Swap Options tutorial for hands-on usage.