Outcomes over Activity - evolving Kusama’s chaotic credentials

Rather than seeing Kusama’s runtime, resources and assembled parachains as independent elements, it is useful to consider the whole as an operating system.

Given the ecosystem’s innovative aspirations, we might call this operating system chaOS.

chaOS 1.0 - the attention era

This phase includes the initial build up and build out of a founding purpose and proposition - a canary network for radical experimentation, alongside core infrastructure, tools and services, the delivery of a functioning relay and the onboarding of a first generation of parachains through crowdloans.

A bull market backdrop, matched to hype around crowdloans drove demand for $KSM which created an on-chain treasury and was the primary path to new account creation.

There have been a number of upgrades to the network runtime in this period.

There have also been many proposals to the treasury from a wide range of sources, each narrowly focused on a specific domain with funding structured either as a proposal spend dedicated to specific output or a bounty, where curators represent the larger collective and organise spending to a subset of proposal at their discretion.

Alongside treasury spends and bounties, other funding mechanisms exist, including redirecting the burn to KappaSigmaMu’s collective through a runtime upgrade that hardwired consistent spending to the group into the treasury pallet.

WIthout exception, the metrics used to assess relative value of spend have been off-chain.

It is therefore not surprising when we look at the data, that there has been virtually no on-chain impact to Kusama treasury spending.

Source: Subscan

The sharp spikes are due to popular crowdloans which succeeded at driving awareness and short term speculative attention, but did not sustain any meaningful engagement.

This is not just a Kusama problem, estimates put the number of active users in the whole DotSama ecosystem - including all parachains at around 1000, with perhaps 10-20k associated active addresses, whilst the ecosystem has a combined market cap of over $14bn.

If the first era of development can be defined as the attention era, with a primary focus on off-chain metrics the opportunity is to progress to a new era - that of on-chain contribution, whose design thinking, tools, services, value accrual, organisational philosophies and spending are united by a move towards on-chain metrics.

chaOS 2.0 - the collaboration era

The next phase of Kusama’s evolution is shifting in a number of fundamental ways:

  • Off-chain → On-chain ROI
  • Directions over domains
  • Cooperation, over competition

At the heart of this strategic shift is a simple understanding that Kusama is an operating system whose own resources - including the spending power of its treasury and the demand for its blockspace and therefore its security as a service proposition are inherently dependent on the success of its parachains which to date, have been conceived as independent entities.

It is a cooperative operating system, without a cooperative organising principle or culture.

Off-chain → On-chain ROI

It is acknowledged that the Kusama treasury is a common good resource - though the express purpose is not clearly defined - so let’s do so now.

The Kusama treasury exists to sustain the operating system on which its network depends.

Its sole focus is to drive on-chain performance to ensure its longevity.

If we follow this logic, we can clearly answer the question of whether Kusama should fund parachains - the answer is clearly yes, if that spend is in service of the higher goal.

In fact, we can use this logic to assess any and all spend - and in turn the rewards offered in terms of the ROI it gives in terms of objective on-chain metrics.

  • If the treasury spends £1m equivalent over a year to build a YouTube channel with 1m subscribers - that would be seen as a success in chaOS 1.0.

  • If £1m were spent on hackathons, workshops and other education initiatives leading to an impressive sounding 1000 new developers in the ecosystem, this would also be a success in chaOS 1.0.

This work is about generating off-chain awareness.

The next phase is about conversion to on-chain impact.

From here, we can begin to think more concretely about how on-chain performance, can equate to on-chain rewards - allowing for successful approaches to be paid according to their achievements as established via objective, inarguable metrics.

Not all spend needs to drive direct on-chain metrics, but all spend needs to be coordinated to that end - for example new tools, services, incentives and organisations should be optimised and integrated into more cohesive strategic directions.

Directions over domains

Kusama and Polkadot spend has historically fallen into domain based projects.

From validator infrastructure, to wallet development, media projects, marketing, events, interfaces, accounting, governance incentives, tattoos and even chocolate bars, these initiatives tend to be domain specific projects, delivered by separate teams who aim to solve a narrow issue on their own.

To use an analogy, this approach is akin to a group of adventurers lost in a jungle, each with a separate set of skills and experience, setting off in a completely different direction, with some limited set of resources. On their own, they will fail, collectively, they are far more likely to survive.

If chaOS 1.0 was an individualist pursuit, then chaOS 2.0 is a collectivist endeavour, oriented around common goals and outcomes - and for that we need to evolve our understanding of how we cooperate and coordinate.

Rather than separating proposals into domains, we need to form collectives, whose express purpose is to dissolve the boundaries of experience to better serve the common good - namely driving on-chain performance.

This means a collective will necessarily contain and source members with experience and capabilities that span all of the emerging areas of knowledge that constitutes the chaOS.

Just as the Kusama treasury is considered a common good resource, so we can begin to see the role of collectives as groups ready to develop a new generation of on-chain incubated parachains, whose primary values and mission is to persist and expand the capabilities of the chaOS, with a clear sighted focus on on-chain metrics.

The challenge is in assembling and maintaining the cohesion of such a group and orienting its primary direction.

To this end, we can see parachain blockspace and its utility - as an explicit common good - there is no your chain or my chain, in the end the operating system of chaOS lives and dies on its ability to coordinate resource to service all aspects of the network.

Parachains that build with this core insight in mind will align more concretely with the emerging needs of the whole operating system, not just focus on their own independent business models.

Our journey from single player, to multiplayer mode, allows us to see the future of the Substrate Builder’s Programme, will not be off-chain, but fully on-chain. Currently there is vast effort to educate teams how to build on Substrate, however once they deploy to a live network, they are left without support, when it comes to the highly complex nature of the social technology they aim to sustain.

Launching a network, and then figuring out how to collaborate is hard.

The next generation of parachains will necessarily emerge from successful collectives who emerge through the systems together via fully on-chain processes, sharing support structures, learnings, culture and developing on-chain reputation as they go.

This approach will lead to more efficient allocation of blockspace as on-chain metrics demonstrate which particular function or utility is needed and demanded.

These on-chain incubated networks need not even have their own tokens, but can be coordinated around the existing Kusama operating system.

Cooperation, over competition

In chaOS 1.0 intelligence is siloed, funded content is distributed all over the internet, with very little curation of that material into on-chain native media destinations that can build deeper engagement, whilst insights gained in one domain, do not travel to others, meaning there is no compounding of collective learnings when it comes to driving adoption of the network.

Everyone is working really hard, but right now the network doesn’t care.

The current bounty models introduce curators - who receive delegated trust from the wider Kusama collective, with freedom to spend however they see fit, to achieve the milestones or goals set out in the proposal. Child-bounties shift this further, allowing for multi-layered spending structures - its curators all the way down.

To date curators have been seen broadly as a coordinating or oversight role, however when we consider them to be an entirely independent class of network contributors - responsible not just for checking homework, but for actively sourcing, structuring and driving forward collective initiatives that are driven by outcomes over activity, they become far more valuable.

Curation is therefore not just something done at the proposal level, but it is something that exists at all levels of the emerging stack and between the experiences and talents of the assembled contributors, a constant and recursive feedback loop that iterates the direction of the group.

If the attention era has been creativity in single player mode, then the collaboration era is about creativity in multiplayer mode.

This is not a radical insight, in companies, a curator is generally known as a CEO - except in this brave new world, we are dissolving these boundaries and aiming to share value more efficiently, equitably and transparently.

The great news is, by rewarding a collective, rather than the individual for driving the metrics that matter, we can ensure that performance based pay is not reserved for those implementing some specific tool or project which would create more competitive outcomes, but rather emerging inter-disciplinary groups, who share the spoils of their united endeavours.


How do we avoid a situation where people have to constantly look like they are the ones driving the key metrics inside the group?

How does this model compare to having a normal employment or business contract?

A side effect of transparency is that it can breed jealousy.
A side effect of dissolving boundaries is that someone with more skills will get less rewards when boundaries are dissolved with a group that is not as resourceful.

There are a few answers to that, but the question you’re asking is a very complex one - and this is not a crypto problem, it’s a challenge that exists in any and every organisation or corporation that seeks to deliver innovation of some sort.

The answer for the last couple of hundred years has rooted around shares - e.g. you have a % stake in a company (or a DAO) and that share represents your rights to cashflows as dividends or on sale of stock.

This has proved very successful at incentivising and rewarding innovation, but in general, the majority shares are dictated at the outset, with founders and first investors holding largest stake. The same has held true for crypto-networks to date and indeed DAOs.

What is better is to think about a collective as a fluid group, with many evolving performance metrics and indeed on-chain reputation, which allows us to (imperfectly) weight rewards to the group within a nuanced payment structure.

For example, R&D is highly valued, but might not have immediate commercial impact - and therefore performance rewards. But it is vital - and ultimately leads to downstream performance.

An understanding of the value of research - is a strategic / cultural notion in many ways - and therefore it will be important for the collective to value that.

We cannot hope to design a perfect system, but we can improve on what has gone before.

Collectives are in effect on-chain ‘businesses’ - so they have many things in common with employment and contracts, but just in a more fluid, composable and scalable way - well that is the hope. To date, most DAOs (inc Substrate chains) have design issues that compromise this potential.

It depends on the context - if a deal is unfair, then of course, highlighting that fact can cause issues, but in the end, this is a cultural problem, not a technical one.

To your second point, that’s not necessarily true - and relies on the design decisions for how value is created, coordinated and rewarded. What you’re really talking about is a football team - where there is 1 player who is 10x better than the rest based on the metrics that matter - say scoring goals.

The team fight together for wins - and compete for team goals and prizes. The players individually have their own reputation and value. Some players are more team oriented, others are more mercenary.

In the end, the most successful teams are those that balance the needs of the individual with the needs of the team. Often the ‘best’ players are sold by their clubs, for the good of the team.