Discussion: Launching the Kusama Innovation bounty with external financing partners through a ParaNote structure
Background
Kusama faces a number of challenges when it comes to driving ecosystem innovation, spending its treasury effectively whilst moving towards models where ROI of spend can be attributed more directly to on-chain adoption.
Even though the treasury may control millions when valued in fiat terms, its actual spending power is constrained by the requirement of funded teams to sell KSM for working capital, which creates sell pressure, thus reducing the available capital over time.
There is therefore a chicken and egg situation - innovative concepts are necessarily abstract initially, but with current majority rule based governance experimental endeavours are not easily, or sustainably funded.
Without driving innovation, the value proposition of the network falters, which will over time lead to a re-pricing of the network - and a subsequent fall in the value of the token, and its associated treasury.
Existing approaches from investors focus on single, large ticket financing - taking stake in a network at one point in time, ordinarily ahead of launch, which is often not the best structure for growing a highly complex and interdependent network. Given the highly volatile and organic development of public blockchains and market cycles, it makes more sense to have access to a draw-down facility that can be tapped as and when it is required, ensuring tokens are sold at optimal moments.
Kusama innovation bounty
Via paraNotes, we can create an efficient, transparent and fluid crypto native financing structure focused on the driving innovation and adoption of next generation, interoperable blockchains such as Kusama.
Flexible financing, enables decentralised teams building a new generation of on-chain governed blockchains to access pre-agreed stable-coin denominated funding as and when it is needed, rather than in one lump sum, allowing for more tactical, strategic and adaptable spending.
External capital partners provide this funding through governance mandated agreements with a blockchain treasury - a process mediated by a team such as Decent Partners.
Deployed funds are accessible to groups with a track record of driving network innovation.
This capital forms the foundation of a patronage based model, with external partners able to co-finance projects alongside the initial innovation funding, diversifying risk over time and driving adoption of the underlying technology - and core network value accrual.
How a paranote works
ParaNotes are coordinated by an Innovation Council.
A spending proposal is submitted to a treasury requesting some amount of tokens.
Upon approval, these tokens are delegated from the main treasury account to a bounty account on the blockchain, with funds stewarded by the council.
At their discretion across a predetermined agreement period, this council can sell the assigned tokens to investors, allowing them to time market conditions in a favourable way based on the current liquidity of the tokens at a 7/14/30 day TWAP.
In return, investors send stablecoins to the bounty account - these funds are then used to finance projects that will drive adoption of the underlying blockchain and accrue value to the network.
Questions
One question that has come up is one of oversight - and accountability - e.g. what if the DAO decides to recall delegated funds from the bounty, after some USDT etc has been sent.
Currently legal agreements between a W3F and funding partner give some assurances - whereas in a fully on-chain model, the will of the community trumps all off-chain agreements.
High level discussion document here including initial scope.
Formalised Bounty proposal to follow.
Comments (4)
I read your post about launching the Kusama Innovation bounty with external financing partners through a ParaNote structure. I have some concerns and questions about your proposal. Firstly, it seems like you are suggesting a complex financing structure with external partners and a team such as Decent Partners mediating the process. This raises the question of accountability and oversight. Who will be responsible for ensuring that the funds are spent effectively and in line with the community's goals and values? What measures are in place to prevent abuse or misuse of the funds? Secondly, you are proposing a patronage-based model, where external partners co-finance projects alongside the initial innovation funding. While diversifying risk over time is a good thing, it can also create conflicts of interest and dilute the community's influence over the direction of the projects. How will you ensure that the community's voice is heard and that the projects are aligned with the community's needs and values? Thirdly, your proposal seems to focus on attracting external financing partners and drawing down on a facility as and when required. While this may seem like a good idea in theory, it could create pressure to sell KSM tokens at suboptimal moments, leading to a reduction in the available capital over time. How will you balance the need for funding with the need to maintain the value of the network and its associated treasury? Finally, I have some concerns about your track record as the founder of Decent Partners. It has been noted that you are the only member of the team and that you have three dormant companies. Additionally, you have already obtained millions of dollars from Edgware treasury and are now seeking funding from the Kusama treasury. This raises questions about your motives and whether you are genuinely committed to driving innovation and adoption of next-generation, interoperable blockchains such as Kusama. While I appreciate your efforts to drive innovation and adoption of next-generation interoperable blockchains like Kusama, I still have some concerns about your previous proposals and track record. As you know, your recent proposal for "GMI crypto media" was rejected by the Kusama community due to several issues, including the high price for producing 10 podcast episodes, lack of clear outcomes, and concerns about your previous use of funds from Edgware treasury. Given these issues, I think it's important to be transparent and accountable in your future proposals. Furthermore, I understand the need for external financing partners, but I'm not convinced that your proposed ParaNote structure is the best way to achieve this goal. It's important to have oversight and accountability in the allocation of funds, especially when it comes to a community treasury. While your proposal outlines some measures for oversight, I'm still concerned about the potential for misuse of funds. Overall, I think it's important to address these concerns before moving forward with any proposal for funding from the Kusama treasury. I encourage you to be transparent and accountable in your proposals and to work towards the common good of the Kusama community.
Another day, another attempted Grift by MRB - I'm not sure why you think the Kusama Treasury is here to give you a job all the time?
You say 'a process mediated by a team such as Decent Partners'. We all know there is no 'team' as the Company only has one employee and it 2021 the business had net assets of £16...- it says so in the accounts. (links below)
It also says that you set up 3 other businesses, all which are dissolved or liquidated and you want us to trust you with mediating this innovation fund..?
You also tried to blatently raid the treasury for $200k for 10 podcasts? You already fooled the Edgeware treasury and got £15k for 4 episodes and what was the outcome - how many listeners did you get/where did you post the metrics? You talk about ROI yet you don't think about it when it comes to your own proposals.
Just because you write eloquently and like to pad out the words like its some school thesis, it doesn't mean you should treat the community like fools..
Just write the TLDR next time: MRB wants treasury funds to subsidise his failing businesses and may hand some out - maybe even to fund useless podcasts
https://find-and-update.company-information.service.gov.uk/company/10153409/filing-history
https://find-and-update.company-information.service.gov.uk/officers/TrZjwwFJ4uNi9itKbNXECud98u0/appointments