Next to the proposals process, a separate system for making tips exists for the Treasury. Tips can be suggested by anyone and are supported by members of the Council. Tips do not have any definite value, and the final value of the tip is decided based on the median of all tips issued by the tippers.
Currently, the tippers are the same as the members of the Council. However, being a tipper is not the direct responsibility of the Council, and at some point the Council and the tippers may be different groups of accounts.
A tip will enter a closing phase when more than a half plus one of the tipping group have endorsed a tip. During that time frame, the other members of the tipping group 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.
There are two types of tips:
public: A small bond is required to place them. This bond depends on the tip message length, and a fixed bond constant defined on chain, currently 1 DOT. Public tips carry a finder's fee of 20%, which is paid out from the total amount.
tipper-initiated: Tips that a Council member published, do not have a finder's fee or a bond.
Bob has done something great for Polkadot. Alice has noticed this and decides to report Bob as deserving a tip from the Treasury. The Council is composed of three members Charlie, Dave, and Eve.
Alice begins the process by issuing the report_awesome extrinsic. This extrinsic requires two arguments, a reason and the beneficiary. Alice submits Bob's address with the reason to a post on Polkassembly that explains her reasoning for why Bob deserves the tip.
As mentioned above, Alice must also lock up a deposit for making this report. The deposit is the base deposit as set in the chain's parameter list, plus the additional deposit per byte contained in the reason. This is why Alice submitted a URL as the reason instead of the explanation directly: it was cheaper for her to do so. For her trouble, Alice is able to claim the eventual finder's fee if the tip is approved by the tippers.
Since the tipper group is the same as the Council, the Council must now collectively (but also independently) decide on the value of the tip that Bob deserves. Charlie, Dave, and Eve all review the report and make tips according to their personal valuation of the benefit Bob has provided to Polkadot. Charlie tips 10 DOT, Dave tips 30 DOT, and Eve tips 100 DOT.
The tip could have been closed out with only two of the three tippers. Once more than half of the tippers group have issued tip valuations, the countdown to close the tip will begin. In this case, the third tipper issued their tip before the end of the closing period, so all three were able to make their tip valuations known.
The actual tip that will be paid out to Bob is the median of these tips, so Bob will be paid out 30 DOT from the Treasury. In order for Bob to be paid his tip, some account must call the close_tip extrinsic at the end of the closing period for the tip. This extrinsic may be called by anyone.