Reimbursement of 94 KSM Trapped Due to Kintsugi XCM Routing Bug (Compensation in KINT Equivalent)

I am requesting a treasury spend equivalent to 94 KSM, paid in KINT, to reimburse three XCM transfers that became permanently trapped due to a known parachain-side bug in Kintsugi’s XCM handling (Polkadot-SDK issue #8496).
This issue was not caused by user error and has been acknowledged as a chain-level problem.

To ensure fairness and avoid price manipulation, the requested reimbursement amount is calculated using the Gate.io KSM/KINT exchange rate, plus a 10% buffer to account for potential price deviation.

The resulting request is:
12,908 KINT + 10% buffer ≈ 14,200 KINT

Background and Evidence

On three separate occasions, I attempted to transfer KSM to Kintsugi via standard XCM. All three transactions were successfully executed on the origin side, but the assets became trapped on Kintsugi, never reaching the intended account.

The transactions were:

1. 16 KSM https://kusama.subscan.io/xcm_message/kusama-19dbe45ea7b000fb372f5b429e38c9d330ea879b
2. 28 KSM https://kusama.subscan.io/xcm_message/kusama-c7d5f4f59b1c52d9708b0472c58d7f93fc6d5d9f
3. 50 KSM https://kusama.subscan.io/xcm_message/kusama-0aef35a697ccf41638c00e53f01b779fefa30ea0

Total: 94 KSM

After investigation and communication within the ecosystem, it became clear that the assets were trapped due to a known issue in Kintsugi’s XCM routing logic, documented here:

🔗 Polkadot SDK Issue #8496
https://github.com/paritytech/polkadot-sdk/issues/8496

This issue resulted in misrouting or misprocessing of incoming multi-hop XCM messages. It is important to note:

• This was a Kintsugi-side technical issue
• There was nothing the user could have done to prevent it
• In contrast to typical “user mistakes,” these funds are not recoverable through standard XCM claim mechanisms

Why Reimbursement Is Appropriate

• The transfers were executed exactly according to standard XCM workflows
• The bug originated from the parachain implementation, not the user
• The issue has been acknowledged upstream
• The assets are not claimable through any automated or manual recovery extrinsic
• Kintsugi has a strong governance history of supporting developers, builders, and users affected by unintended technical issues
• This compensation request is aligned with ecosystem norms (e.g., prior refunds on Basilisk, Asset Hub, etc.)

This treasury request ensures fairness, mitigates user loss, and reinforces trust in Kintsugi during its migration toward stable multi-chain interoperability.

Requested Amount

To maintain fairness and transparency, the reimbursement is based on:

• 94 KSM market price vs KINT using Gate.io
• 12,908 KINT equivalent
• +10% buffer to account for reasonable market fluctuations during referenda and enactment

➡️ Final request: ~14,200 KINT

The beneficiary address will be the same Kintsugi account used for the XCM destinations.

Closing Note

These trapped assets resulted solely from the parachain XCM implementation bug described in Issue https://github.com/paritytech/polkadot-sdk/issues/8496.

This referendum seeks to compensate the affected user in a transparent, fair, and community-governed manner while reaffirming Kintsugi’s commitment to reliable cross-chain functionality and user safety.

Thank you for considering this request. I am happy to provide any additional details or verification required.