Dear Kusama 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. Future cost compensation will be done under the [Kusama System Parachain Collators Bounty 20](../post/2613) starting from January 2024.

**[Full Proposal](https://docs.google.com/document/d/1UQi_DFP99i-VE8tOEQQHR10xqbIPHLqGHNW0f1imuEE/edit?usp=sharing)**

The proposal aims to secure 844.654 KSM for Collators on the Kusama System Parachains network for services delivered for 3 months - 10-12/2023.

![](https://example.com/your-image.png)![](https://i.ibb.co/W5Jdk2r/Screenshot-2023-11-21-at-23-52-39.png)

We encourage the Kusama 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' performance and the overall network efficiency.
- Proposed Solution: Monthly operating costs payment for service providers in Q4 2023, transitioning to a bounty system from January 2024.
- Expected Outcomes: Securing 844.654 KSM for Collators for services provided from 10-12/2023, ensuring sustainable funding and incentivizing Collators.

#389 Kusama System Parachain Collators - Tips Q4/2023