The Treasury raises funds continually. These funds are used to pay for developers that provide software updates, apply any changes decided by referenda, adjust parameters, and generally keep the system running smoothly. Funds may also be used for further goals such as marketing activities, community events and outreach. This is ultimately controlled by all DOT holders via Governance and it will be the community and their collective imagination and judgment which really determines the course of the Treasury. Funds for Treasury are raised in two ways:
- by channeling some of the validator rewards that come from minting of new tokens, and
- by channeling a fraction of transaction fees and of slashings. The first method allows us to maintain a fixed in ation rate while simultaneously having the validator rewards be dependent of the staking level: the difference between the scheduled minted tokens and the validator rewards is assigned to Treasury in each era. We also argue that it is convenient to have a fraction of all slashings be redirected to Treasury: following an event that produced heavy stake slashing, the system is likely to need additional funds to develop software updates or new infrastructure that deal with an existing issue, or it might be decided by Governance to reimburse some of the slashed stake. Thus, it makes sense to have the slashed DOTs available in Treasury, instead of burning them and having to mint more DOTs soon thereafter.