What is a Tip?

Polkadot has a tipping mechanism that allows anyone to propose a tip to any Polkadot address. Since the funds are coming directly out of the treasury, it's necessary to have an approval process in place to determine which tips should be accepted and which ones should be denied. For now, this task is assigned to the council, however, this could change in the future via governance.

Tips can be suggested by anyone holding KSM or DOT, which are then endorsed by council members. Tips do not have any fixed value: The final value is decided based on the median of all tips issued by the councilors. 

How to Submit a Tip Request

Perhaps you've witnessed someone doing something awesome for the Polkadot ecosystem, and you'd like to suggest a tip for them. 

1. To start the process on the Polkadot-JS UI, head to Governance > Treasury > Tips and select Propose tip.

2. Next, enter the beneficiary who will receive the tip, along with the reason for tipping.

3. Sign and submit the transaction, and your tip will be successfully submitted. You can monitor your open tips from the tips page as shown above, or on a third-party site such as Polkassembly.

A tip will enter a closing phase when a majority of the council has endorsed a tip. During that time frame, the other members of the council can still issue their tips, but do not have to. Once the window closes, anyone can call the close_tip extrinsic, and the tip will be paid out.

Base Deposit

There is currently a base deposit of 0.033 DOT required to complete the transaction, plus an additional deposit per byte contained in the reason. The more characters that are added to the "tip reason" field, the higher the deposit will be when you finally sign and submit the tip. This deposit is reserved until the tip is accepted, and then released. If the tip is rejected, the deposit is slashed.

See this wiki page for more details, and an example scenario.

NOTE: If the tip is accepted by the council, you will be eligible to collect a finder's fee, which is currently set at 20%.