![](https://images.unsplash.com/photo-1500576992153-0271099def59?ixlib=rb-1.2.1&ixid=MnwxMjA3fDB8MHxwaG90by1wYWdlfHx8fGVufDB8fHx8&auto=format&fit=crop&w=1738&q=80)
This introductory post is aimed at opening up a dialogue between [Edgeware](https://gov.edgewa.re) and Kusama communities, ahead of the mainnet launch of [Kabocha](https://kabocha.network) on Kusama. 

It is rooted in the ongoing experience of contributing to the evolution of Edgeware’s leaderless Substrate network and the successful incubation of grass-roots parachain projects such as Kabocha that have been curated and funded through [a series of interlinked proposals](https://commonwealth.im/edgeware/discussions/Kabocha) by different contributing teams. 

### Values aligned collaboration

As a solo-chain, Edgeware is operating at the highly experimental and decentralised end of the spectrum, but ultimately lacks financial clout and awareness, whilst Kusama is not short of funding, or awareness but lacks the chaotic verve that it was established to promote. 

We believe there is an interesting opportunity to foster innovation together and in turn further the founding ideals of the Polkadot project by returning to first principles and building on the basic super-powers of Substrate. 
 
Our aim is to unlock co-funding of research and development from Kusama for specific areas of investigation that can sit alongside and extend Edgeware’s own investment in R&D.

This work is initially designed to establish philosophical context and design frameworks for a third category of parachains known as *Network Publics* that offer the potential to become a vital balancing force to the established for profit and common good categories.

Network Publics will be developed through Edgeware’s emerging grass-roots processes and community with a view to onboarding to Kusama and then Polkadot over time.

### Edgeware, Kusama and Polkadot

Although not immediately obvious given their relative market caps, the three oldest Substrate chains are organically evolving from their shared codebases and genesis distributions into a curious family that each offer different pros/cons, cultures and interests.

**Polkadot relay chain**

The most valuable, the slowest moving, with the largest public profile, but the most centralised when it comes to governance and contributions.

**Kusama relay chain**

More decentralised and risk taking than Polkadot, but inheriting the same genesis distribution.

**Edgeware solo chain**

The least valuable but most decentralised at launch owing to 2019's lockdrop distribution, and with a large share still held by Parity/W3F.

### Some background

Edgeware was bootstrapped using a lockdrop, where holders of ETH could lock their tokens for 3, 6, 9 or 12 months in return for receiving EDG.

It was also possible for smart contracts holding ETH to signal on behalf of their holdings, enabling Binance, Coinbase and Aragon to receive distributions on behalf of their users.

The total ETH locked in the process finalised at 1,199,728 ETH, with signaled funds (from smart contracts) at 4,346,544 ETH with over 4000 different Edgeware addresses created in the lockdrop process, from over 10,000 transactions.

Binance finally distributed the tokens in March 2022, creating a massive long-tail of EDG holders.

### Wide and fair distribution

With 90% of the token distributed to the public in the lockdrop, the door was opened to a community of holders who could mediate the decision making powers of the founding team.

Edgeware was originally positioned as a platform for incubating governance experiments, however the broad distribution has ensured Edgeware is itself the primary experiment, created conditions for a deadlock between the largest holders, with parties disagreeing principally not on what to fund, but on how to fund which eventually led to the departure of the team who launched the project.

This has ensured things move more slowly than with a more centralised project but over the long term enables the primary value proposition of public network protocols: credible neutrality.
![](https://s3.cointelegraph.com/uploads/2020-10/9813bfb6-57d2-4de0-85bf-6f61a0fe7e2e.jpg)

### Adding Kabocha to the mix
With Kabocha becoming a community incubated parachain bonded to Kusama's relay, we have added the final step in the development lifecycle, demonstrating that public chains beginning in Edgeware can migrate upstream.

Understanding this emerging hierarchy we see an opportunity to develop a grass-roots incubator of fairly distributed, sustainably funded and transparently governed parachains that aim to prioritise and scale contributions over speculation.

This can in turn create a nursery of decentralised parachain candidates that can begin their life cycle as R&D projects in Edgeware, extending to Kabocha, before onboarding as fully fledged networks in Kusama, before reaching Polkadot as they economically mature.

The next post will introduce Network Publics in more depth for further discussion and debate ahead of a funding proposal. 

If you’re interested, you can also dig into related thinking around the [Network Services model ]([https://commonwealth.im/edgeware/discussion/3650-decent-partners-an-introduction-to-network-services](url)l) developed by [Decent Partners](https://decent.partners) in Edgeware and Kabocha and our thesis around [Network Public Service Media](https://decent.partners/thinking/crypto-web3-and-narrative-gravity). 

Hello Kusama, this is Edgeware. 

[![question.png](https://i.postimg.cc/dQg0HtGt/question.png)](https://postimg.cc/jCQKCT8G)

### Hello

So i'm pretty new to the Kusama community, but I've been an active (and funded) contributor in Edgeware/Substrate for couple of years. Funding has come for both my own 'network R&D' (of which this post is a small example) alongside helping source and develop other individuals / teams proposals.

The most ambitious R&D/curation project resulted in the creation of Kabocha via [a series of interlinked](https://commonwealth.im/edgeware/discussions/Kabocha) but independent proposals from a variety of new and existing Edgeware contributors. 

This experiment in grass-roots contribution, curation and funding concluded with Kabocha winning a Kusama parachain slot. 

Prior to that I spent 18 months contributing to [Decred](https://decred.org) - another on-chain governed/upgradeable network with its own [treasury and proposal system](https://proposals.decred.org). For anyone interested, I documented the experience of [contributing to the DAO here](https://github.com/monsieurbulb/forksintheroad/blob/master/Decred_forks_in_the_road.md). 

Having engaged in the WagMedia discussions recently its been reassuring to see many of the same arguments, miscommunications and philosophical differences play out in similar ways as they did in Decred and Edgeware.

Perhaps unsurprisingly on-chain governance, funding, culture, oversight and direction setting is really quite hard.

So I thought it might be useful to dig out a mildly tweaked [first post in Edgeware](https://commonwealth.im/edgeware/proposal/discussion/536-why-are-you-here-edgeware-founding-values-culture-and-focus) which was posted as a way of resetting discussion at a point when argument was at its peak and the bigger picture was getting lost. 

## Why are you here? Kusama founding values, culture and focus

Discussing and outlining a founding charter such as [Decred's Constitution](https://docs.decred.org/governance/decred-constitution/) is a good way to ascertain what kind of culture Kusama is seeking to foster.

It's also a great opportunity to solicit input from a diverse set of stakeholders and community members who each have valid but varying perspectives on the project - its successes, failures and challenges. 

With the project in the very earliest stages, asynchronous conversations the norm, and decentralised governance a work in progress, it is important to utilise the tools available to drive increasing community participation to aid decision making, transparency and to better plot a path forward together.

Given the sometimes contentious debate around the recent [WagMedia proposal](https://kusama.polkassembly.io/post/1757) and the mentioning a few times that Kusama is [the most misunderstood ](https://discord.com/channels/771178421522268191/771178424538628099/1008713493597397095)project in crypto, it seems like it’s a pretty good time to ask the emerging community a few questions…

(These are just prompts so feel free to ignore)

-  What was the motivation that excited the Kusama team at the start (individually and collectively)?
-  The same for the existing council members?
-  What inspired the name and the logo? (might be useful for newcomers to hear the story)
-  What first attracted you about the project?
-  What problems do you see Kusama solving?
-  What is Kusama not for?
-  What other projects do you follow or think Kusama could improve upon?
-  What lessons do you think Kusama can learn from other projects?
-  What founding values or principles do you think Kusama should have? (e.g. should the project focus on public benefit etc)
-  What areas in the wider crypto-sphere interest you?
-  What areas or communities outside of crypto interest you?
-  What does success look like to you? (what kind of a world do you see?)
-  What does failure look like to you? 

Hopefully this can be a useful exercise. I'm excited to hear from a wildly diverse set of viewpoints and in deciphering the commonalities and opportunities for progress that exists.   

  





 





Why are you here? Kusama founding values, culture and focus

## **Introduction**

This discussion was inspired in two parts by both recent post on the Polkadot website, [Proposal for Common Good Parachains](https://polkadot.network/blog/proposal-for-common-good-parachains/) and through the ongoing challenges of facilitating and scaling on-chain contributions in fully decentralised networks such as [Edgeware](https://edgeware.io) and its soon to launch mirror network, the  Kusama parachain [Kabocha](https://kabocha.network). 

From the Polkadot post: 

> The roadmap that we originally had in mind for common good parachains has been rendered obsolete by many conversations with community members over the winter and spring. And that is a good thing...

> ...As the common good parachain team at Parity grows, we would love to see more community involvement from all types of users.

## **A proto-proposal**

Given the current blunt instrument of on-chain decision making and the resulting frictions this can cause through the rapid entrenchment of binary positions, this concept is presented as a kind of *proto proposal* - a middle ground between a discussion and a concrete proposal, as a way of opening up some creative space to question certain basic assumptions about what relay chains should and shouldn't do, and the same for the parachains onboarding to them. 

The aim is to spark discussion, before developing into a more formalised project - either resourced by Parity as part of the general common good initiative, or as a more organic community approach that would bring together a specific working group. 

Further, the aim is to open the door to considering how existing and future design frameworks, governance policies and even infrastructure may evolve or adapt when considering the emergence of grass-roots and decentralised parachain projects incubated not by VCs but organically through on-chain funding and organisation. 

## **Background**

Currently DEXs on Kusama (and Polkadot) have been delivered by for profit parachain teams such as [Karura](https://acala.network/karura), [Basilisk](https://bsx.fi/) and [Genshiro](https://genshiro.equilibrium.io/) and are focused in general on more speculative uses and users. 

The Kusama treasury has also been tapped a number of times [to provide liquidity](https://kusama.polkassembly.io/post/1503) to these parachain DEXs, setting a precedent for KSM to be used to better facilitate token exchange. In of itself this funding has been contentious, with certain community members believing VC funded projects should not be able to utilise public funds given their business models. 

Both Kusama and Polkadot also have *common good* chains that are akin to public utilities. These chains don't have their own tokens and in return gain certain network privileges such as the ability to receive funding from the relay via on-chain proposals and the ability to be granted a lease via governance rather than needing to provide a sizable KSM bond for a slot in the auction process.  

On Kusama, [Statemine](https://guide.kusama.network/docs/kusama-statemine/) exists for minting assets and [Encointer](https://encointer.org/) for IRL identity proofs, with new chains in the works that will provide functionality to benefit both [Collectives and Bridging](https://polkadot.network/blog/proposal-for-common-good-parachains/). 

In recent discussions, community members have asked if common good chains may compete with For Profit parachains, and the responses were mixed, but all agreed that competition was good since it would then drive up the quality of the products on offer. 

One thing that wasn't discussed was that the competitive matrix on which DEXs seek to differentiate is broad and there are very specific ways that a common good DEX, might be developed in a way that does not encroach on the territory of existing parachain DEXs.

## **The problem**

An area of genuine *common good* demand, is for the facilitation of token exchange from parachain teams who are not financially equipped, philosophically motivated or legally structured in such a way that they would invest heavily in liquidity mining or complete complex centralised exchange listings.

For CEX listings, a sole issuer is demanded and thus takes on the full legal liabilty on behalf of all contributors. In the UK for example, if my company [Decent Partners](https://decent.partners) attempted to deliver a service to the community of listing KAB on Binance, we would likely be considered to be acting as a *cryptoasset exchange provider*. It is a criminal offence to act as such in the UK without being registered with the UK FCA - something we could do (though onerous), but automatically drags the project towards the incumbent system, rather than remaining a parallel and independent experiment.   

In addition, the primary day to day operational issue facing more grass-roots teams who do not have VC backers and rely on scaling grass-roots contributions on a broad and fair distribution base, is the liquidation of proposal funding, rather than market driven speculation of the token.

## **Solution - Kusama public / common good DEX**

The aim would be to develop a Kusama 'common good' DEX narrowly focused on providing exchange and liquidity services for parachain contributors with funded proposals that removes the need for grass-roots parachain projects to list on CEXs and more speculatively minded DEXs.

The KSMDEX, would be selective about the pairs it lists - and require chains that do apply for listing to satisfy certain prior criteria, in the same way common good chains can access treasury funding, but for profit ones (supposedly) can't, 

Similar to a cooperative model, the DEX would **only** set prices within its own sovereign economic zone, and the compromise would be that community led parachains wishing to list on the KSMDEX would face is that they could not list on any other DEXs or CEXs. 

In this model there would be no need for a new token as the Kusama treasury would provide liquidity, making use of the un-used funds and would retain all trading fees. 

If as we hope, more projects such as Kabocha develop and also leverage the common good DEX, then this can develop into a revenue driver for the Kusama treasury, whilst maintaining a simple and publicly focused model. 

## **Issues / challenges**

Currently common good chains are the sole preserve of Parity - so this would it seems need buy in from the developer team there. I'm not sure if this is simply due to the Parity team having more expertise and incentive to deliver this rather than anything *blocking* external / community initiatives so interested to hear from the team on that. 

In the event Parity did not have the interest or resource to progress something like this, then this could be developed by a working group who were interested in the concept, given it was something that could be voted on via referendum. 

## **Questions and comments**

Please tell me why this is a dumb idea if you believe it is, or if not, tell me how it could be better - looking forward to thoughts.

As previously mentioned, the hope is that this and following concepts can loosen a few of the  shackles that are holding back a more open and experimental playground in Kusama.   




Proto-Proposal: Develop a Kusama 'common good' DEX specialised in providing liquidity to funded proposals 

# Proposal: OpenGov Incubator Fund, an on-chain development programme for governance delegates covering research, development and creative experimentation

*Note: the following is a draft and will be updated and amended based on feedback and as the initiative evolves.*

### TL:DR

A [shokunin](https://kusama.polkassembly.io/post/1969) style anonymous time delayed proxy organisation created on the [Kabocha](https://kabocha.network) parachain, dedicated to funding, supporting and advancing [OpenGov (Gov2)](https://medium.com/polkadot-network/gov2-polkadots-next-generation-of-decentralised-governance-4d9ef657d11b) experimentation with the purpose of developing a new generation of fluid and effective on-chain organisations and creative collectives, that can steward the next generation of Kusama development, adoption and awareness, whilst maintaining tight collaboration, knowledge sharing and values alignment. 

*"Web3 Foundation / Substrate builders programme for OpenGov orgs and delegates..."*

## Background

Substrate's on-chain governance is both a technical marvel and a fiendishly complex system that requires the development of a whole new field of expertise, talent development and onboarding processes. 

Put simply, its something that can only be learned through active participation and engagement across wildly different and emergent domains.

OpenGov (previously Gov2) is the key to unlocking the latent potential of the polkadot protocol - and represents the clearest and most obvious differentiator within the wider crypto ecosystem. 

It has been said that Polkadot is the biggest bet yet on multi-chain maximalism, but it is also unquestionably the biggest bet yet on the power to **change** and the ability to **direct** - to coordinate not just on-chain orgs, but a whole armada of chains… with the arrival of parathreads able to spin up and down, we also have another dimension of change to think about - **transitory** projects,

For the multi-chain vision of relays, parachains and XCM to succeed, it demands active and sustained creative collaboration across chains, communities and contributors, in a manner that is far harder to coordinate that anything yet attempted in any other ecosystem.

And what is more, it needs to ensure this coordination ensures primacy of the founding aims of Web3 - of the mission over the market cap…

This is DotSama’s greatest strength, and weakness…

If Bitcoin is a slab of rock, and Ethereum a giant container ship changing direction once every few years, then DotSama aims to be…

![](https://aws1.discourse-cdn.com/standard21/uploads/polkadot2/original/1X/4b38f0b70ff2c43a45783f1425ceb2565ffdf80a.jpeg)

# Problem
The opportunity is obvious and yet there are a relatively small group of individuals and on-chain organisations that specialised experience in the development, proposing and managing of treasury funded proposals - and basic on-chain orgs (multisigs) in Gov1. 

Historically there has been a lack of innovative proposals within Kusama to merit its 'chaotic' credentials and it has been hard to onboard new teams through existing governance systems, which has led to a lack of on-chain innovation that pushes the possibilities of the network and its ecosystem. 

With the arrival of OpenGov, there is an even smaller group who are now attempting to get their heads around the next generation of the governance system  - its tools, variables, tracks, origins, capabilities and limitations. 

This recent advice given by Rob H to potential gov delegates in Polkahaus:

> The best thing in the build up for Polkadot's OpenGov is for people with opinions on Treasury funding to start to put together budgets and spending plans for areas they are interested in and knowledgeable about. One of the main benefits of OpenGov is to move away from a reactive council model populated by people who don't really know that much about treasury management.

Governance delegation is clearly central to kickstarting and scaling OpenGov, yet even the most experienced and knowledgable teams are scratching their heads as to how this new system can be utilised, designed and interpreted - across every layer of the stack, let alone expecting newcomers who have yet to experience Gov1 to get their heads around origins, tracks and a whole heap of new variables. 

We see this as a problem and an opportunity we can address together by seeing OpenGov as a bold new design space, and a blank sheet of paper in a manner similar to the arrival of mining or validating, except this time with the incredible opportunity to leverage DotSama's untapped resources to organise and scale a new generation of creative contributors, rather than just maintain network security.  

By better coordinating the treasuries of DotSama we can address the primary issue faced by Bitcoin and Ethereum - namely overspend on security compared to R&D, something that Vitailk outlines here in his post: [The most important scarce resource is legitimacy](https://vitalik.ca/general/2021/03/23/legitimacy.html).

![](https://vitalik.ca/images/legitimacy-files/chart.png)

When we see OpenGov as blank slate governance, it is obvious there is a lot of work to do... and plenty of open questions.

- What are the variables of OpenGov - what do we optimise and for what outcome? 
- What are the origins and the tracks - again, what are they for and how can we best utilse them? 
- Do we expect specialist on-chain organisations dedicated to each origin or track?
- Might we have some group pitching some vision or project that requires a lot of tipping - for say a creative project that has 1000 very small proposals that together manifest a larger outcome? 
- Do we think on-chain orgs will be fluid across orgins and tracks… flexing the needs of incubated projects to match the opengov system?
- How do we faciliate creative collaboration between teams focused on OpenGov? 
- What does value accrual look like in this new system - is it all grants or can there be other ideas that seek to align parachains and on-chain orgs?
- How do KSM (and DOT) holders discover who to delegate their votes to? 
- Does each gov delegate create their own proposition that is they aggregated into some shared UX/UI?
- How do we create coherent user experiences that bring alive the outcomes of OpenGov?
- How do we share the developments and (mis)adventures of gov delegates - what they learn, what they fund, what they build? 
- What does this user journey look like for wallets / voters / proposers / investors / newbies?
- What creative projects can we use to drive end user participation in governance? 

The big question is do we expect this will happen organically? Or is there an opportunity to learn the lessons of Gov1 and to to give it a push through a more fluid, accessible and scalable operational approach than the council?

## Solution - OpenGov Incubator Fund 

An agile on-chain organisation using the [shokunin model](https://polkaverse.com/@shokunin/let-s-use-pallet-proxy-for-chaos-and-good-32567), populated with an emerging collective of members aiming to become governance delegates within DotSama. 

This initiator ***OpenOrg*** would be funded by Kusama and later Polkadot and be razor focused on driving experimentation, awareness and adoption of ***OpenGov***. 

*Tools, services, structures, processes, creative projects, apps, UX/UI, events, experiences, education, entertainment...*

A shokunin org uses time delayed proxies to create an 'optimistic' form of governance in that, any member of the proxy can queue a transaction which then executes unless others organise to stop it. We ultimately believe experienced teams know what is best to spend their time on and should be trusted to execute - with the assembled members providing oversight of their peers - knowing that they need to spend limited resources wisely. 

Each member would also be aiming to evolve their own specific OpenGov delegation proposition and so each would benefit from the support of a wider group - each attempting to address challenges with understandind and making best use of the new governance system. 

Over time, the fluid and emergent structures can naturally evolve and scale to becoming a waterfall of connected but independent DotSama orgs that can collectively push the project forward - solving DotSama's key challenges of adoption and awareness using our own tools to do it.  

![](https://i.postimg.cc/gjZPmPWJ/Open-Gov-X.png)

## Collaboration

By structuring the system through shokunin style orgs, we can onboard aligned groups and collaborate closely, we also aim to create events and experiences dedicated to fostering creative collaboration. 

We operate three community focused locations in [London](https://theportico.uk), [France](https://chaletbelin.fr) and [Brazil](https://www.instagram.com/sitiolibelula.organic/) that we have bootstrapped using funding from on-chain contribution over the past few years, with the aim of connecting crypto to real world needs. 

## Outcomes

In a bounty like manner, this initiative is designed to kickstart gov delegates, tooling and services for expanding the utility of OpenGov - so it is less focused on specific projects, and more about bringing talent together under a shared direction. 

Teams can join and be funded with the aim of developing into independent but connected on-chain organisations that KSM (and later DOT) holders can delegate their votes to.

These shokunin addresses can also solicit external support from aligned investors, organisations and patrons.  

The approach would aim for sustainability for gov delegates - rather than a blank cheque, the point of bootstrapping on-chain orgs has to be a path to active participation, onboarding of contributors and real revenues. 

We expect that we can bootstrap both internal economies - gov delegates / on-chain orgs that offer services to other orgs, and also use this unique knowledge and access to novel resources to onboard external partners - including creators with large followings wishing to turn their followers into contributors or large corporates who will invest R&D funding into experiments that can better align their own resources with that of emerging talent, projects and teams. 

## Motivation 

Quoting from Jam's original (and inspiring) [shokunin post](https://polkaverse.com/@shokunin/let-s-use-pallet-proxy-for-chaos-and-good-32567).

> Be excellent to one another and do good for the long term, you can and should do anything you believe will be beneficial to the goals of the network; inform and act, but permission is unneccessary, as long as you do things that wouldn't require forgiveness; any success is everyone's collective responsibility.

## Funding request 

**£1m in KSM to cover 12 months of R&D.  **

The OpenGov Incubator Fund is itself designed to become an OpenGov delegate (meta) within the Treasury track, which would mean the funding would continue as long as people continue delegating meaning there would be no need to top up and the approach would become fluid. 

There has also been the suggestion from Tom-stakingplus, the author of the [Infrastructure Builders Programme](https://docs.google.com/document/d/16USQYVhlyAlrU829EUB2TRoqUC0nnfoS_uCdZ84HT8k/edit) that we could also consider an alternative route to the  (paraphrasing): 

*Instead of constantly draining the treasury, we stake an amount and use the proceeds of staking to fund the program into the future. It should be possible to do this from a treasury proxy account through existing pallets. If we stake directly from the treasury and change the reward destination to the OpenGov proxy it wouldn't even be a spend proposal from gov2 perspective.*

## Funding address

A time delayed proxy on the Kusama/Kabocha blockchain TBD 

## Funding oversight

Decent Partners core team will maintain a multisig that also acts as oversight. 

We aim to enable Kusama governance to have time delayed permissions for emergency oversight through the collectives pallet. 

In time as more orgs contribute to the programme, we can further manage the oversight. 

## Reporting

There will be quarterly reports covering activites, funding and learning.

We will be documenting the process through film-making and interviews, bringing the experiment to life in entertaining ways. 

## Long term incentive alignment

Over the longer term we also aim to contribute KAB as collateral to back the proposition through the [ParaNotes](https://forum.polkadot.network/t/introducing-paranotes-regenerative-defi-for-advancing-the-paraverse/1002) model, further aligning the incentives between relay, parachain and on-chain org.

We believe this approach can operate as a companion / alternative to the current approach of crowd-loans to securing slots. 

This approach can also lead towards the development of an OpenGov parachain incubator programme, completing the full development lifecyle purely through on-chain governance, funding and contribution - further expanding Polkadot's credentials when it comes to claims of sufficient decentralisation. 

## Kickstarting team

We [Decent Partners](https://decent.partners) (DP) will kickstart the venture and onboard other interested groups (shokunin, chaosDAO, PolkaHaus, WagMedia etc) who have assembled talent, experience and are aligned with the core values of Web3.  

DP are a UK based company and on-chain organisation primarily located on the Edgeware blockchain, where we have been organising, structuring and funding proposals for the past 3 years as council member, contributor and the developer of the [Network Services](https://commonwealth.im/edgeware/discussion/3650-decent-partners-an-introduction-to-network-services) model of on-chain talent development, coordination and management. 

We [kickstarted the creation](https://commonwealth.im/edgeware/proposal/discussion/1159-why-hedgeware-is-currently-a-terrible-idea) of a Kusama parachain created entirely from [on-chain funding grants](https://gov.edgewa.re/discussions/Kabocha) through Edgeware's treasury system, bootstrapping a network and learning every facet of the process from the ground up. 

We are now developing a novel form of on-chain identity system on [Kabocha](https://kabocha.network) called [Seeds](https://gov.edgewa.re/discussion/6355-kabocha-seeds-outlining-the-evolving-concept-for-sovereign-identity-in-the-edgverse-and-beyond)) for grass roots on-chain organisations and future governance delegates within DotSama. 

Selected posts: 

- The need for (network) public service media in [Crypto, Web3 and Narrative Gravity](https://decent.partners/thinking/crypto-web3-and-narrative-gravity).
- An analysis of common good and free market parachains in [The State of Dotsama](https://forum.polkadot.network/t/the-state-of-dotsama/676). 
- A vision for creating the [Messari of Dotsama](https://forum.polkadot.network/t/creating-the-messari-of-dotsama/958). 
- Aligning core incentives between relays, parachains and on-chain orgs in [ParaNotes](https://forum.polkadot.network/t/introducing-paranotes-regenerative-defi-for-advancing-the-paraverse/1002). 
- Driving on-chain creativity, decision-making and on-chain orgs through [preferendums](https://forum.polkadot.network/t/a-better-treasury-system/291/18?u=rich) . 

Prior to that we contributed to Decred's onchain governance system, resulting in this [outline of our experience](https://github.com/monsieurbulb/forksintheroad/blob/master/Decred_forks_in_the_road.md). Note many of the issues in Substrate governance are replicated in other on-chain governed systems. 

We bring together deep experience that covers blockchain, substrate development, on-chain governance, community development, media production and distribution, fund management, grant-making, impact reporting, brand partnerships, compliance and regulation. 

**Our core team:**

- Richard Welsh (mrb/monsieurbulb) - co-founded [Copa90.com](https://copa90.media), creative director [Bigballs Media](https://www.hollywoodreporter.com/news/general-news/liberty-global-buys-stake-bigballs-831290/), and [I Am Playr](https://www.youtube.com/watch?v=ZceipOGEblk). 
- Derek Gannon - ex COO [Guardian Media Group](https://www.theguardian.com/gmg), [Comic Relief ](https://www.comicrelief.com/)and CEO [Virgin Unite](https://unite.virgin.com/unite/)
- James Payne - creator/exec producer [Four To The Floor w/ Channel 4](https://www.channel4.com/press/news/four-floor-returns-c4-fifth-series-and-launches-new-digital-content-brand), former [creative director of music, BBC Studios](https://www.televisual.com/news/bbc-studios-makes-james-payne-music-creative-director).
- Frode Aschim - founder of Ether Capital, active in blockchain since 2014 including a listed company’s token issuance, a large scale mining operation, fintech software, liquidity providing and other development. Previously ran hedgefund Range Capital and has a varied financial experience including being a CF27 with the FCA in a regulated function.

## Partners 

This proposal is itself a fluid and evolving document - we are in discussion with members of Shokunin, ChaosDAO, PolkaHaus, Nova, RMRK and a number of parachain teams who may well become partners of the initiative. The current maximum members of a proxy is 32 members, but this can be extended via linking further proxies. 

**Contributors**

- [Bruno Skvorc](https://twitter.com/bitfalls), Founder @rmrkapp, NFTs 2.0, cofounder @cyphermod_SDK, W3F alum. Writes @dotleap and @review_nft

- [Stated Tech](stated-tech.notion.site/), creators or [Root](https://gov.edgewa.re/discussion/7887-proposal-root-the-evolution-of-onchain-governance), rethinking on-chain governance from the ground up

- Daniel, project lead [Krievo/Virto common good chain](https://kusama.polkassembly.io/post/1520) focused on experimenting the [Local Incentives Protocol](https://virto.network/docs/whitepaper.html)

**Networks**

We are beginning this experiment with a request to Kusama, but we aim to have both [Edgeware](https://edgewa.re) and [Kabocha](https://kabocha.network) running and experimenting with OpenGov and these two networks will also become contributors to the overall initiative, contributing experience, talent and blockspace. 

We hope just as the Substrate builder's programme is chain / team agnostic, so the OpenGov Incubator Fund can expand its funding sources and network partners as OpenGov becomes more standardised across the ecosystem. 

**External parties**

We have a number of creative teams, startups and companies keen to experiment with on-chain governance and collaborative creation that will be introduced over time. 

[Auto Fabrica](https://gov.edgewa.re/discussion/4747-project-auto-fabrica-a-decentralised-creator-collective) - design studio and emerging collective

[Kinterrella](https://kinterrella.com) - magnetic energy storage enabling decentralised off-grid energy production.

[Maia Pictures](https://maia.pictures) - drama and comedy production company 

[Phantom Land](https://phantom.land) - an independent, digitally-led creative agency headquartered in London, with a second studio PHQ based in Auckland.

[Vacuum Labs](https://vacuumlabs.com) - engineering, design, product development, and data science services for the fintech industry. 



Proposal: OpenGov Incubator Fund, an on-chain development programme for governance delegates covering research, development and creative experimentation

### Rethinking the burn - optimising the Kusama funding system beyond KappaSigmaMu

> There is no waste in nature, everything is recycled - [David Suzuki](https://en.wikipedia.org/wiki/David_Suzuki)

Within the current design of Kusama and Polkadot protocols there exists a treasury and a burn mechanism, designed to incentivise the spending of accrued funds.

In the current 7 day spend period on Kusama 1000 KSM / $27k will be burned unless it is utilised via spending proposals. 

Currently 99.8% of that spend is unused, 0.2% is redirected to the [Kappa Sigma Mu society](https://hackmd.io/@beHJoYs7TbGToD_lc1aa8g/HJgZcXAmD). 

This current design is hardwired into the pallets, and cannot be tweaked via OpenGov or the previous generation of calls - instead it requires a runtime upgrade. 

Within Polkadot, this waste is even more pronounced - in the next spending period 403.76K DOT will be burned, equating to $2.18m in old numbers. 

So far this mechanism has been presented as a stick used to beat voters into releasing funds, however it has not had the desired outcome, so perhaps we could rethink its purpose, as a bootstrapping budget, to demonstrate that a lot can be achieved through a little.

### Burn -> Ignite 

Rather than burning money, we can see it as a streaming fund, that can ignite ideas at the lowest possible levels, into grass-roots initiatives that are themselves also designed to ensure the steady flow of funding, rather than drip fed proposals. 

We propose redirecting Ignite into initiatives such as the [OpenGov Incubator](https://kusama.polkassembly.io/discussions) where the money can be better utilised to kickstart research, development and experimentation for on-chain organisations. 

We would aim to scale using the same approach on Polkadot. 

This can then be seen as the upstream proving ground for more experimental projects that may then return for larger funding from Kusama and Polkadot treasuries. 

### KappaSigmaMu - where does the experiment go from here?

Currently the continued treasury benefits received by KSM Collective are from a hardwired runtime upgrade, rather than through more well known forms of on-chain governance. The spend is still mandated by holders given it required approval of a runtime upgrade, but that does not mean funding cannot be overturned through a new PR.

**Four potential next steps:**

1. Kappa Sigma Mu is presented as a noble experiment, but one that has ultimately failed in its goals of driving adoption of artistic communities and should therefore not benefit from perpetual, unchallenged funding. 

*Outcome*: A PR is submitted to remove the funding via a runtime upgrade and the 0.2% is burned (for real). 

2. Kappa Sigma Mu is presented as a noble experiment that hasn't had the impact it was designed to, but the mechanism has value.

*Outcome*: A PR is presented to redirect funds to a new address and organisation who submits their candidacy for a stab at delivering on the experimental mantle. 

3. Kappa Sigma Mu is presented as a noble experiment that is still early in its journey and given all of that ink splattered about, there is some literal skin-in-the-game with the motivation to make the society work over longer time horizons. 

*Outcome*: Funding to KappaSigmaMu continues but is subject to some annual review that requires a report of activities and experiments - it doesn't need to hit concrete deliverables, other than delivering on its promise of fostering innovation. 

4. Kappa Sigma Mu is presented as a noble experiment that is still early in its journey and the potential to work over longer time horizons. In this way, we are trusting that _something_ will happen. Given this faith - we can present a parallel execution of the KappaSigmaMu experiment that benefits from the same 0.2% burn mechanism to sustain its experimentation and R&D, but does so with different onboarding, membership and indeed perspectives. 

*Outcome*: A PR is submitted for a runtime upgrade that both increases the burn to 0.4% of the treasury and redirects the new 0.2% to a new on-chain R&D focused organisation.  

### A way to bootstrap R&D collectives

If we assume **4** is perhaps the preferred and fairest outcome for all (ink or no ink), then we can see the burn model in Kusama as the pre-ignition phase for on-chain collectives of resolutely anti-disciplinary teams, able to develop their experiments with some basic creative income, before presenting the output of their adventures in more formalised forms to the less mobile forms of on-chain governance. 

Currently Polkadot burns 1% of treasury each spend period - given Kusama's chaotic credentials, there is no reason why we cannot progressively invert the current incentives, moving up to 1% of the treasury to match Polkadot and enabling 5 independent research collectives each receiving 0.2% of the burn, or indeed beyond that to 10% of Kusama's supply per period, on the road to incubating up to 50 on-chain collectives. 

This ratcheting of incentives not only frees up funding for experimentation - it also begins pressing holders to spend funds a little more adventurously. 

At this stage in the network's history and development, the danger of not taking risks should be there for all to see. 

### Final thought

In general, the issue with large treasuries denominated in a highly volatile native network token, is they create unexpected incentives that tends towards protective and conservative spending, creating bipartisan divides between proposers (want funding) and voters (defend the treasury). 

Since Substrate networks are in effect sovereign social networks sitting atop a baked in money printing machine, the relative value of this treasury is constantly in flux, and really against the current economic environment, the opportunity is for us to move away from a hodling mindset - itself a meme born to secure the bags of those already holding, towards driving real economic activity - measuring progress within DotSama by flow of money, not just price, and in turn considering more interesting narratives for what *backs* this money. 

If there is one thing crypto is famous for it is profligacy and waste, by addressing one of the basic issues in our current system, we can begin the process of questioning the basic design parameters and incentives of the current system, optimising towards a more regenerative and resourceful approach that aligns better with Web3's stated intentions.




 



Rethinking the burn - optimising the Kusama funding system beyond KappaSigmaMu

*(view and comment directly on full proposal [here](https://docs.google.com/document/d/1JYzGLXJbrDHMzH0KFwojhhXwP9pvBQA5i94xpqnR2tI/edit#heading=h.w42ka09wf9ko)).*

**Network services:** [Decent Partners](https://decent.partners) ([Subscan](https://kusama.subscan.io/account/FvrbaMus8iASyrQYkajQWDxsYvG5gb72PFPuvy8TvkFFVGn)) w/ [VacuumLabs](https://vacuumlabs.com)

**Contact**: @lightbulbwelsh:decent.modular.im (element)

**Date**: January 2023

**Short description:** ParaNotes recompose existing and underutilised ecosystem resources to create a novel process, mechanism and product that utilises novel forms of ecosystem native collateral to align the long term interests of on-chain collectives, parachains and public treasuries, building shared value together.

**Requested KSM:** 11,706 KSM
**Budget:** [View spreadsheet](https://docs.google.com/spreadsheets/d/1YQJtf-4MROq0Yk4tLXmm_CT8jTuP7-PigcAaRtF2nII/edit#gid=0).

## Introducing ParaNotes

ParaNotes aim to introduce a new grass-roots and fully on-chain mechanism, process and product that aims to align the long term incentives of:

- An on-chain collective looking to get funding from treasury to develop activities and initiatives that drive a parachain use case. 
- A parachain/thread that has secured a slot and has empty blockspace, some price discovery and a highly illiquid token.
- Relay (system) chain with funding for projects, but currently no stake in the projects it funds.

You can think of a ParaNote a little like a mortgage for a self-build home - the NFTs and associated media are the plans for the house, the parachain tokens representing a pledge of blockspace are the deposit and Kusama/Polkadot is the bank.

ParaNotes are principally coordinated by collectives based on the Polkadot system chain structured as a shokunin style optimistic time delayed pure proxy.
These network agents set a vision, assemble required talent and negotiate proposals that are voted on by the governance of their respective parachain and public treasuries respectively utilising XCM and the bridge hub that will connect KSM to DOT. 

Rather than just requesting a grant from the treasury, the collective structures a ParaNote - a convertible asset backed loan (similar to a convertible note).

Collateral is made up of their concept (represented as upgradeable NFTs) and some illiquid parachain tokens which have some nominal value reflecting unused blockspace. 

When a ParaNote is created a derivative token is created with 1 KSM = 1 Parachain token. 

If KAB price moves positively compared to KSM, then KSM holders get a good deal and vice versa. 

The convertible aspect of the instrument enables a ParaNote to be converted by relay governance, with the collateral diversifying the treasury and forming a new model of network native value accrual. 

In return, the collective’s ongoing funding is secured in a manner similar to The Fellowship or the Kappa Sigma Mu society, with treasury funding hardwired into the protocol through a runtime upgrade.

In this way, we establish a fully on-chain governed and mandated development pathway for ecosystem teams that demonstrate success over three stages:

1. Public (Gov2) grant proposals - initial work
2. ParaNotes - more focused development 
3. Hard wired support - unlocking sustained funding 

ParaNotes offer a chance to address the issue of which teams and projects can/can’t request and receive treasury funding using a fully on-chain process that remains open and flexible but definitive in its ability to establish via on-chain governance the will of the protocol. 

In the same way the Web3 set out to morph DOT from a security to software, so the ParaNote process can aid us to make clear the current political state of parachains, establishing objectively via on-chain governance whether a parachain is a system, common good or free market design - or indeed part of a new class we call Network Public Parachains (NPP). 

Given current industry headwinds, we believe ParaNotes can demonstrate that a more rational, and regenerative crypto economy is possible, allocating resources already within the ecosystem more efficiently and providing more focused onramps for external capital into projects that are designed to create real world impact through the development, implementation and scaleup of [network] public services. 



ParaNotes - a dynamic and fully on-chain mechanism for kickstarting collectives, driving adoption of parachain blockspace and diversifying public treasuries.  

Proposal: GMI crypto media, an original network public service podcast series

*Original forum post [here](https://forum.polkadot.network/t/an-xcm3-experiment-kusama-treasury-account-taking-stake-in-the-kabocha-parachain/2127/1)*

-------

There have been discussions for around a year about alternative approaches for incubating parachains, whilst also making use of relay treasuries and better aligning long term interests of voters and proposers.

This in [discussion post for funding grass-roots teams ](https://polkadot.polkassembly.io/post/1596)aims to create guidelines, but its off-chain structure means it will always be limited since funding will remain subjective and therefore prone to friction - per [this comment](https://polkadot.polkassembly.io/post/1596#db493114-a937-4394-8a5a-7233401a4b8b).

> we probably should have funding policy and programs that are fair for all, and are focused on the usefulness of the proposed, rather than how rich or poor is the proposal team. A bit more meritocracy might be a good way to put it.

The question is can we improve on this?

> It has been a long-standing idea within the Polkadot network for the on-chain Treasury to hold many assets, in addition to its native token. One, users making Treasury proposals may want to request funding in other assets besides DOT. In addition, the Polkadot stakeholder community as a whole may want Polkadot to acquire stakes in other assets. By providing the multi-asset support that Statemint specializes in, it can allow more options for Treasury use and management. [Proposal for Common Good Parachains](https://polkadot.network/blog/proposal-for-common-good-parachains) 

The latest Kusama upgrade includes [XCMv3](https://github.com/paritytech/polkadot/pull/4097) makes possible some interesting new things related to multi-chain governance, asset locking and cross-chain exchange.

In its simplest form, the following is an outline for an experiment we would like to run, that would see an on-chain org based on Kabocha parachain create a funding proposal to Kusama structured as an asset swap thus giving KSM holders some potential upside in the future success of a parachain.

Note KAB is intentionally unlisted on any CEXs or governance permissioned DEXs such as Karura etc.

Kabocha is a fully decentralised and leaderless network whose largest holders are Parity/W3F due to its genesis/snapshot in the Edgeware community.

The proposal relates to funding that is core to its own value accrual model, and so distinct from more general spend on better multisigs etc and therefore may be viewed as contentious by voters who do not wish to fund ‘independent’ networks, but only common good.

We’re actively researching the below, but would love to hear from others about how they might approach the following:

## Proposal high level

*Kusama referendum: 1000 KSM for funding research and development of a new NFT based treasury pallet for Kabocha.*

*Kabocha referendum: 1000 KAB spend to be approved via simplemajority and sent to statemine account where KSM holders govern its future use.*

*KAB will later be listed on the Statemine DEX offering a path for KSM holders to recoup its funding - or hold as part of an emerging treasury diversification strategy, which could see further spending in this model.*

## On-chain structure?

The aim would be to make this a unified multi chain governance process, executed across two democracies - that could develop its own UI/UX for teams to fund their new substrate chain without needing external capital.

How might this work technically is the open question?

## Unlocking performance related funding

If we can marry permissionless listings and price discovery, with on-chain metrics and performance related pay, we can develop this mechanism into a stream funding model that enables successful teams to build without racing to hypey CEX listings, or return constantly to have work and progress reviewed, addressing some of the challenges facing teams in the ecosystem - and governance at large.

All comments and questions appreciated.


An XCM3 experiment - Kusama treasury account taking stake in the Kabocha parachain discussion

### 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](https://docs.google.com/document/d/1E39XsXMa_Syk5dXj9GX9wupwxwRFJAMB5qFg4Os9O0Q/edit#) including initial scope. 

Formalised Bounty proposal to follow. 


Discussion: Launching the Kusama Innovation bounty with external financing partners through a ParaNote structure

![](https://i.postimg.cc/bNPVGhnv/Screenshot-2023-03-21-at-18-50-34.png)

Chaos Sessions is an emerging R&D initiative that unites a broad collective of ecosystem talent to radically reshape network strategy, culture and outcomes through applied research and development, built around an emerging on-chain media ecosystem.  

Watch the first [Chaos Session crowdcast](https://www.crowdcast.io/c/chaossessions). 

Next session Wed April 5th (ish) time TBC.

Events are bi-weekly and the project will shortly expand into publishing, podcasting and other media, all rooted in some on-chain component.  

The initiative is not focused on a single domain such as media, events or governance, but aims to introduce a connected strategy that dissolves the boundaries between disciplines and indeed chains to better more effectively direct ecosystem resources - talent, capital and culture. 

It is led by a strategic focus on **outcomes over activity** as a path for **driving network ROI.**

### The Problem

![](https://i.postimg.cc/gkqzRmBt/Screenshot-2023-03-29-at-10-50-00.png)
![](https://i.postimg.cc/B6xyyQFd/adoption.png)

### Further reading:

- [The state of DotSama](https://forum.polkadot.network/t/outcomes-over-activity-evolving-kusama-s-chaotic-credentials/2286) 
- [Outcomes over activity ](https://forum.polkadot.network/t/outcomes-over-activity-evolving-kusama-s-chaotic-credentials/2286)
- [High level strategy document](https://docs.google.com/document/d/10pxfPBdPaRn19GuYx6al5VPzm8q3G-RiEwKm017Gxjk/edit)

More soon. 