Polkadot and Kusama shared economy

With the upcoming bridging between Polkadot and Kusama it’s good to start thinking not only about how messages will be sent back and forth but also what this connection means for both ecosystems and how the two separate economies might start getting coupled together perhaps to the point of becoming indistinguishable from each other.

Some people in Kusama might feel that the network should be its own thing independent of the fate of Polkadot(while some in Polkadot still think Kusama is a testnet) therefore they should be funding different projects. I think it’s naive to think of the two networks as separate entities, maybe one day the canary will turn into a phoenix that will be reborn completely free no longer flying under the shadow of its cousin, but in the meantime Polkadot and Kusama will continue to be a single ecology with huge overlap where anything happening in one place can greatly impact what happens in the other.

We recently got an interesting question by @ChrawnnaCorp in our on-going referendum to fund the Virto team, about whether it might be better to seek funding in Polkadot instead of Kusama because a team with an existing track history in the ecosystem asking for a considerable amount of funds could be draining the more limited resources of Kusama that could go instead to fund smaller teams and individuals just getting started. It’s interesting because it makes me realize different people might see the role of Kusama and its treasury in different ways. My answer to this question is that regardless of the amount of the funds, since our 2023 roadmap is mainly about building experimental technology like hardware prototypes, an experimental collective or wallet software from scratch that is not recommended for production use, this fits better under Kusama and its philosophy of being the place for experimentation and creativity, regardless if the team has been around 1 month or 10 years. Perhaps later when our developments become “boring” Polkadot treasury will make more sense but not for now IMHO.

So how do we deal with the fact that Dotsama being so young will inevitably attract many teams and projects building on the more experimental side of things during its early years of existence? we don’t want to empty the canary’s beak while Polkadot plays arsonist with its funds, right? Gavin has given us a possible answer, once the two chains are connected, as an opening ceremony for the bridge, Polkadot could send an amount of DOT to Kusama’s treasury and leave those funds in the hands of KSM holders. But I think we can do better, Polkadot community should acknowledge the crucial role that Kusama plays in the success of the network and have a more formal deal to allocate a suitable amount of funds from its under-utilized treasury to the hard-working cousin over a period of time with the contribution decreasing over the years(e.g. following something like a logarithmic curve) reflecting the growing maturity of the overall system.

Other questions about the tighter coupling of the networks come to mind like, should the DOT in Kusama come with governance powers? perhaps DOT holders want their contribution to give them some kind of power? Could there be more collectives besides the Fellowship that are shared between the networks and further couple their fates? Interested to hear some thoughts on this topics :slight_smile:


Think this is absolutely right - whether its obvious or not, there is a fully on-chain development environment emerging from the wildest and most chaotic governance, to the most considered and secure, Edgeware > Kusama > Polkadot. This has always been my instinct - you learn the most about the practicalities of on-chain governance (good and bad), where the safety nets have been removed.

The natural path forward for parathreads/parachains is a fully on-chain incubation cycle.

Both Kusama and Polkadot have benefitted from councils who softened the hard edges of the tech.

Love this idea - if we bridge KSM and EDG, which we aim to, then we can follow this development cycle through to real grass-roots.

Thanks for the tag Daniel. Yes this has only occurred to me since we’ve been tracking the movements of the treasury weekly on AAG! The suggestion would have been more useful last week before you submitted so my bad!

For my part, see the networks as deeply entwined. Tech develops and proves itself on Kusama before moving onto Polkadot. Teams can do the same with treasury funds. We can choose to offer KSM for teams to prove themselves and concepts (after, i might add, something tangible to show already). Then productive teams with ongoing missions could be funded more sustainably on Polkadot, leaving KSM for new entrants to follow in their footsteps.

Given the experimental work of Virto team, it’s an edge case worth discussing. I would still advocate for DOT Tokenholders to fund such an R&D team, even if their tech is tested in the wildlands first. Considering the “Polkadot Payroll” program Gav mentioned at Sub0, established and productive contributors and teams may end up more sustainably on Polkadot anyway.

OR it may not be just one or the other… Funding for such a team could also be split between core funding with DOT and R&D grants with KSM. Something like that.

But with the market value of KSM so low, large dollar spends scoop buckets of assets that could otherwise be bet on newcomers in the near and long term.

Nothing to knock Virto team. Recent thoughts shared too late maybe! But Daniel, if you have time come back and we’ll make it a discussion on AAG. Every Monday at 4:30pm UTC.

Lovely quote.

My take is that once the economies are connected via XCM, the price of blockspace becomes a comparable quantity. Especially for chains/threads where latency is not crucial: they can deploy where blockspace is cheaper and securely utilize the whole range of Polkadot and Kusama applications.


Related to Rich’s topic and thinking about R&D and ways to fund it. I would like to hear some opinions about using the approach I mentioned of having a formal agreement between the two networks where Polkadot acknowledges Kusama(or one of its parachains) as the innovation and R&D hub of the ecosystem and proceeds to pay regularly an “R&D tax” to compensate the limited funds the canary has to sustain the massive amount of innovation that we should aim for.
The experimental nature of Kusama serves well to attract experts across many domains to develop all kinds of creative initiatives, we need lots of daring teams and individuals who might not have clear plans on how to shoot to the moon but will try their best to do so. Most will fail but the few that succeed will completely change Polkadot for the best, perhaps the entire blockchain industry or dare I say, the whole world socioeconomic and political landscape.


This was and is the entire point of Kabocha :slight_smile: it’s the only parachain with a broad and fair public distribution that can make this kind of endeavour feasible from an on-chain governance perspective - the largest stakeholders are W3F/Parity - think they have approx 10% due to Edgeware distribution on which KAB is based, much less than KSM or DOT and then the there is a much more evenly distributed long tail.

In the end, distribution is destiny.