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 333 KSM to a 2/2 multisig with signers Leemo & lolmcshizz - which combined with referendum (https://polkadot.subsquare.io/referenda/1479) on Polkadot, 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 slippage during asset transfers.
- **Significance:** Insufficient liquidity leads to users losing larger amounts of assets to fees than anticipated, impacting user experience and trust in cross-chain transactions.
- **Proposed Solution:** Allocate 333 KSM to a multisig for liquidity provision split evenly between Kusama AssetHub and Polkadot AssetHub to enhance liquidity for seamless asset swaps.
- **Expected Outcomes:** Improved user experience with reduced slippage and expected fee payments, fostering smoother cross-chain asset transfers.

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

No Active Proposals