Firstly thankyou for taking the time to read (twice). Part of a proposers job is to explain their concepts to voters, so I'll do my best to respond. Everyone will read concepts and take away different things - such is the nature of these systems.

With that said, here we go:

At the moment it feels like a long discussion thrown into the document (sorry for not being able to find a better description). I believe (and I could be wrong) that proposal is not very clear or concise and that may be the reason for the lack of the feedback or community engagement since this was published one month ago.

This could be the case, tbh it's impossible to know so there's no point drawing that conclusion, all I can do is pretend you are the only person reading and do my best to explain to you :)

With ParaNotes, the thinking is grounded in areas that are not well discussed in the ecosystem nor immediately obvious to most of the community for the simple reason that there are not many people studying, or directly interfacing with it due to the small number of chains and projects for whom this model may be obviously beneficial.

In this regard, the reason for the context setting (what might feel like discussion) is to try and root the proposal within the political structures that are emerging in the ecosystem. This is hard, and will I think be something that will become more obvious over time, in the same way that the ParaNotes model can be hard to grasp initially.

In terms of the specifics where you're struggling:

it was mentioned several times that it is generally ok if the parachain team come forward with their own treasury proposal. Why is there a need for intermediary?

This is not an attempt to replace the existing system of grants where an individual or a team propose an idea to the Kusama (or Polkadot) treasuries. In this model there are two parties - the relay chain and a project team and the funding that is given out has no direct upside to those approving it. In the same way, the proposing team assign no rights or bring no direct value to the relay treasury.

ParaNotes are a way of coordinating three parties - on-chain collectives, treasuries (similar to the existing model) but also a parachains governance.

In addition, unlike the grant model, proposing groups assign some rights and collateral that represents ideas and the native token of a parachain - so rather than a grant, this is closer to a loan where the treasury may actually be repaid.

A further step to this is the 'convertible' aspect to the loan, which means if the collateral that backs the loan goes up in value more than the KSM requested, there is a path for the treasury to decide to convert their loan to equity (taking a stake in the parachain).

So there is no 'intermediary' - simply a proposing team (as before) organising something a little more complex than simply submitting an idea for a grant. The benefits of the additional elements are potential upside for the treasury.

Paranotes acts as the escrow and receive funds from the treasury and tokens from the parachain. Than Paranotes keeps 90% of the funds received from the treasury and forward 10% to the parachain team.

Not quite. ParaNotes themselves have no agency - they are simply a structure / mechanism / process. The ParaNote is created, coordinated and controlled by the proposing team (collective), the relay and the parachain have some oversight to ensure nothing bad happens, but the assumption is that the team are trustworthy, hence the optimistic name.

The collective has access to all of the KSM that is funded (in the example it is $1m), but if the collective were to decide to drain these funds without delivering anything, they would queue a transaction but it would not execute immediately. Then both relay and parachain governance would have the ability to halt the malicious transaction since they are also signatories to the proxy (with time delayed permissions).

What would be the reason for the parachain team to go through the Paranotes and receive 10% of funds rather than going straight to the treasury with their own proposal?

See above response. This is a way to more directly align incentives than a simple grant proposal, where there is no value accrual to the treasury, nor a way to objectively measure the impact of funding decisions.

What is going to happen in scenario where parachain project is abandonded and these tokens end with no value?

This is the risk of everything funded by the treasuries, except in the grant model there is limited upside. That's not to say the grant model isn't good, it's just a different mechanism.

With the Gov 2.0 introduction the whole governance proccess is becoming more decentralized and involves a much wider community. I agree it comes with another set of problems. Why do you think a more centralized initiative like Paranotes can utilize treasury funds better?

ParaNotes is not more centralised, it is simply a mechanism for funding an on-chain organisation, in time there could be many of these collectives funded through the same approach, in fact this is the hope since it is like crowdloans a generalisable system.

Additionally in the proposal we suggest that ParaNotes are a second stage of funding for more experienced teams who have proven out certain things and require funding to bootstrap a parachain, rather than the type of proposal we currently see that are generally focused on existing infrastructure, media and outreach.

ParaNotes are simply a more targeted mechanism to address a specific problem - namely how to fund collectives, bootstrap adoption of parachains and offer direct upside to treasuries for taking the risk - which they currently do not have.

Budget - if I read correctly the asking amount for the work done before presenting this proposal accounts for 420 working hours or around $55,000 when taken all into the account. Is this all related to the research work and creation of this proposal or there is some other work accounted for?

The budget (which is also pinned to the top of this post) lists 400 hours of R&D around ParaNotes to date, the vast majority of which has been done by myself and Frode Aschim (375 hours). This might seem a lot, but in practice this would cover a few months of part time work at the prices quoted. The concept of ParaNotes have been in development for around a year and a lot of time has been spent figuring out the mechanism, the basic technical foundations and the rationale for why they are necessary within the wider context of Polkadot.

If you scroll down to Further Reading and then Published analysis, discussions and comment and especially the State of DotSama post, you can see how the thinking has evolved. None of this work was paid for by the KSM treasury, however it is valuable time and the concept would not exist were it not for the time spent, the many conversations with members of Parity, parachain teams and within our group.

---

Hope that helps - feel free to follow up and I'll endeavour to answer.

Hi Jay. Firstly thanks for reading and the comments, I'll do my best to respond.

This is a very difficult proposal to process.
This concept may have legs but in writing, as a philosophy, it is extremely abstract and difficult to believe in.
Cultural Collateral appears to me like a very loose concept.

Grouping the above, because they are really the same point.

New concepts are necessarily abstract. Explaining things that do not currently exist is hard. If every concept was dismissed before it was proven, then nothing new would ever be developed.

That said, this is not just some idea plucked out of thin air by a newcomer. The insights and experience that root this proposal are hard won.

So yes, the concept may be hard to grasp, the terms may be new, and you might think that it is a waste of your time, but that is kind of the point. If you understood it all, you would be proposing it. If it was easy to visualise, it would already exist.

Proposals that have been brought to Kusama to date have almost exclusively been in relatively familiar areas: marketing/content creation, validator programmes, outreach initiatives and wallets or tools that aim to abstract complexity away from existing infrastructure, incentives and mechanisms.

Given the stated intent of Kusama "Expect Chaos", the fact that the network has not funded hard to understand, difficult to explain and hard to visualise concepts that have aimed to radically reshape its founding design is a huge failure. Are we to just assume that the creators had the foresight to predict its most perfect arrangement, or should we consider it more likely that there is nothing about Kusama which couldn't be rethought or reworked or made better with a little lateral thinking?

This is not to say that anyone with a crazy idea should have money thrown at them, but for those who do present unique and hard won experience, that yields novel insights, ideas and indeed philosophies then yes - we should back their initiatives, even if we cannot see what they can.

Speaking of high risk, it is not until half way through the proposal that we discover the concept will be validated with a loan to Kabocha, your own parachain. While Kabocha has beautiful art, a nice website, and lots of philosophy, it hasn't produced anything tangible -- not a community, not a clear definition of it's purpose.

Since you bring it up, I have no stake in Kabocha. The other founder chose to take a 1.5% share of the network within the genesis allocation. I believed it was better to have a share approved via an on-chain governance proposal when the network was pushed to democracy. I did this for legal, ethical and personal reasons - when the much easier option was to not do so.

This experience came at great personal cost. You have no idea how hard on-chain governance actually is when there is no council, no direction, no roadmap and everyone wants to take the easy route and you are the only one campaigning for long term thinking. However within that experience I learned many things that I wouldn't have done in a less adversarial environment - so for that I am grateful.

If your are interested in the current status of all of the proposals I have been involved in you can see it all here.

While Kabocha has beautiful art, a nice website, and lots of philosophy, it hasn't produced anything tangible -- not a community, not a clear definition of it's purpose.

Just because you cannot see something, does not mean there is nothing to see.

You can view the Decent Partners site for our work to date, a little more of our vision and where things are going. I started this particular journey in 2017 - I'm no stranger to playing the long game.

ParaNotes, Kabocha, Cultural Collateral, our in development on-chain governance project Root - are all founded in the philosophical groundings that you dismiss and are in many ways an explicit rejection of current ecosystem orthodoxy - within Polkadot, but also in crypto more widely.

So when you say it (Kabocha) has produced nothing tangible, no community,* or purpose* I would respond that the things you put value in are not the same as the things I put value in - all of those things are alive and well, just not in a form that you would recognise, after all, why would you.

For what its worth, this post What's the bigger picture roadmap for Kabocha, summarises the thinking that you claim is missing. Once again, you may read it and see it as abstract, unlikely or unproven, but that's irrelevant, because you are not working to bring that idea to life.

The proposed note is calculated by assuming KAB's value to be the same as its parent EDG... but even that chain is quiet. Unless i'm looking in the wrong place, just 8 accounts are contributing 2 or more posts in the governance forums per month. (I actually assume I must be wrong, but can't find anything to the contrary).

Edgeware's price was simply used to illustrate a model - the ParaNote relies on some price discovery for KAB - per the proposal:

ahead of (Kabocha) listings, we have modelled the ParaNote on the current value of Edgeware - the network that Kabocha was born from, and whose supply mirrors Edgeware - note as soon as there is some (Kabocha) price discovery, we will update the model.

I can only suggest that instead of pages and pages (and pages and pages) of ideas (again much of this budget is to fund even more pages), the team follow almost all other teams and individuals applying for treasury funds by producing some working MVPs to test concepts, experiment, and help people understand what's happening through practical application. Ideas are the easiest part of building.

This proposal is to develop the ParaNote MVP. The costs are to cover that development and to test the concept. This is the practical application of an innovative on-chain mechanism, process and product that has been concieved, researched over the last 9 months.

This is in turn the result of everything learned in the development of Kabocha, which is in turn a product of nearly three years contributing to Edgeware, which was in turn informed by my experience with Decred - and then from nearly two decades of starting and scaling digital communities, developing global brand campaigns and original IP.

Please consider the Kusama treasury is to fund early stage experimentation and proving concepts with funded action. Once the team and idea is established in this way, it could be funded more sustainably via polkadot leaving the Kusama treasury for other teams looking to experiment.

Per above, this is exactly what we are proposing.

Alternatively, parachain teams could easily gain access to treasury funds by building applications for the common good such as InvArch's Saturn project.

This point misses the basic proposition set forward, that there is no funding mechanism for grass-roots parachains. I won't comment on another team's initiative.

Finally:

11,706 KSM is 2.7% of the Kusama treasury.

In your recent post you suggested spending $1m from Kusama on Polkadot Citizen Media.

To follow your line of argument, this is currently 7% of the Kusama treasury. What matters is the potential impact of that funding - and I could make a good argument for how that suggested media spend would be better utilised once the concept of ParaNotes is proven out. In the end, these % figures add nothing to the debate since all context is removed.

40% of that you'd like to pay, primarily yourself, for previous and even further research and development of this concept.

I know the value of my time and of my talents and that of the team we've assembled who are among the best in their fields. The budget accurately reflects the work to date.

Returning to this line:

This concept may have legs...

That's all you need to trust, that's all you need to say. From here on its about a leap of faith, because no amount of explaining will get you to see what I can see, and again, that is the point.

This is how investment in research and development works. R&D is not about getting the answers before you start, it is about finding interesting questions to ask in the first place.