Should Kusama spend its treasury onboarding members instead of selling KSM? [RFC-001]

A little while ago we introduced Birdbrain — a shared memory for the Kusama flock, built around on-chain membership rather than passive readership. We said something in passing there that this post picks up: joining Birdbrain requires KSM, because a membership is a real item on Kreivo, not an account bolted onto a website.

That raises an obvious question — who should pay that KSM? — and it turns out to generalise into a treasury argument worth putting to the room. So here’s our first RFC.

The idea in one line: instead of spending the Kusama treasury down into dollars — grants sold for fiat, the money gone, nothing left that keeps earning — spend it into memberships. Kreivo can now sign a real person, or a whole collective, up as an on-chain member in one passkey tap, no seed phrase, no tokens in their pocket. Each sign-up has a small, known KSM cost (~0.3 KSM). A KSM spent this way doesn’t leave for fiat; it moves sideways and leaves behind a member with a reason to keep using and holding KSM.

Three things we’d want to know first, so we’ll say them up front:

  • The ~0.3 KSM is not revenue to anyone. The open membership pool is owned by the Kreivo Treasury, so the payment moves KSM from one public on-chain account to another — it stays in-ecosystem, it isn’t a vendor invoice.
  • Execution would be a bounty, not a blank cheque. The mechanism is Kusama’s own standing-envelope pattern — pallet-bounties + child-bounties, the same shape the Vision bounties (Proof of Personhood, ZK, Art) already run. Governance approves a rule-bound envelope once; payouts happen by a fixed published formula, no per-payout vote, no curator discretion over amounts.
  • We custody nothing — not the funds, not the keys. The KSM never passes through us (it moves to the Kreivo Treasury, as above), and members hold their own keys via self-custodied passkeys — we hold no balances and no signing rights on anyone’s behalf. We are a proponent, of course: Decent Partners runs part of this stack. So the design is deliberately stablecoin- and team-agnostic — anything one team can do here, another should be able to copy. If it only works when we run it, it’s the wrong design, and we’d want to know.

The honest crux isn’t affordability — the whole headline target fits inside a third of the fund. It’s retention, and genuine vs. recycled demand: treasury KSM moved to a community account is not new demand, and the argument only holds if a subsidised member base produces a recurring external inflow that a one-off grant never does. The RFC works hard not to cheat on that distinction, and lays the numbers out so you can check them.

Where we actually are: this isn’t a thought experiment. We have a pipeline of collectives lined up to onboard, and we’ve already started buying KSM ourselves to subsidise their memberships — so the mechanism is live, just running on our own balance sheet for now. That’s what turns this from a would-it-work question into a scaling one: at what point, and at what size, should the treasury co-fund what we’re currently bootstrapping by hand?

Read the full RFC and argue back on the record:
:point_right: Should Kusama Spend Its Treasury Onboarding Members Instead of Selling KSM? · Birdbrain RFC

It’s a layered read — one sentence at the top, then a plain-language version, the economics, the objections, and the on-chain mechanics for whoever wants to go deep. Comments and suggested edits there are signed and kept on the record; that’s where the real debate lives.

And here’s the recursion: taking part in this RFC is the onboarding it describes. When you comment on the RFC page, a single passkey tap enrols you as a self-custodied member of the Birdbrain collective on Kreivo — the signing key stays on your device, we hold none of it — and every contribution (comment, reply, endorsement) accrues to your own evolving seed: a self-owned, on-chain participation graph. So the page doubles as a live demonstration of exactly the mechanism this RFC proposes — no seed phrase, no tokens in your pocket, one gesture.

The main thing we’d put to the room:

  1. What should the initial bounty request be for? Given a real, growing pipeline and members already being onboarded, what’s a sensible size and scope for a first rule-bound envelope — enough to prove retention at scale, without over-committing the treasury before the numbers are in?

And two narrower ones, if you’re going deep:

  1. What retention rate would make this clearly worth it — the threshold the pilot should be judged against?
  2. Should pallet-payments fees route a slice back to the network, and if so, how much?

Where this sits in the process. This is deliberately the first of three steps, in order:

  1. RFC — Request for Comment (now). This post and the live doc. Pressure-test the logic, the numbers, the design. No ask, no vote.
  2. WFC — Wish for Change. If the idea survives contact, an on-chain referendum on the Wish for Change track to establish a mandate — does Kusama actually want to direct treasury this way? — without yet moving any funds.
  3. Bounty proposal. Only with that mandate do we bring a concrete, rule-bound bounty for a specific figure — the “how big” question above.

We’re at step 1. Nothing here commits anyone to anything — it’s a discussion document, and every figure in it is meant to be checkable. Tell us where it’s wrong.

Kusama is dead with infinite supply

Fair concern — but it’s the case for this RFC, not against it, and we can put real numbers on it.

“Infinite supply” only bites when the only thing to do with the token is sell it. An emission with no sink is dilution; an emission with a sink is a subsidy. This RFC proposes a sink: every ~0.3 KSM spent onboarding a member is KSM that doesn’t get sold into fiat, and that leaves behind someone with an on-chain reason to keep holding and using it.

And the demand side isn’t hypothetical — the same Kreivo/Kusama stack already carries real settlement:

  • dUSD, a stablecoin living on Kusama Asset Hub (asset 50000002), has an on-chain supply of ~245,580 dUSD across 29 holders as of today — up from ~67,000 at the start of July. Verifiable on-chain: Subscan | Aggregate Substrate ecological network high-precision Web3 explorer
  • ~$5.88M of cumulative settlement volume has moved through these rails to date, ~$514k of it in the last week alone (including ~$125k of actual card spend). Every one of those real-world payments settling in dUSD is on a live dashboard: https://metrics.bloque.sh
  • Those card rails are provided by Bloque — a programmable-finance SDK that issues Visa cards and multi-currency accounts settling in dUSD, no banking licence required (backed by Visa / Bancolombia / Kusama). It’s what turns “a stablecoin on Asset Hub” into a card you can actually spend.

That is people spending and holding value on Kusama, not just pricing it. Supply is a denominator; this is the numerator — and right now it’s the numerator that’s growing fastest.

Birdbrain’s own community is younger — live on Kreivo (id 1786), with passkey membership register + login working on mainnet, still genesis-stage. The RFC is simply the argument that treasury issuance should be pointed at that same “spend and hold” loop instead of at the fiat exit.

Context first, because Polkadot’s own economics moved in March and not everyone tracks it closely.

Three things happened on Polkadot that bear directly on the argument in this RFC. Summarising for anyone who hasn’t followed them:

  1. Supply capped. Referendum 1710 fixed a maximum of 2.1 billion DOT. On 14 March annual issuance dropped from 120M to ~55.8M — a 53.6% cut — on a schedule that steps down again every two years.
  2. The burn replaced by a pool. Referendum 1827 created the Dynamic Allocation Pool: newly issued DOT, transaction fees, coretime revenue and slashes all collect in one permanent on-chain account, and governance splits it across separate budgets — validators, stakers, treasury, reserve. Treasury burns stopped. The first split runs ~12.6M DOT/yr to validator self-stake incentives, ~25.2M to staker payouts, ~18M retained in the buffer.
  3. Polkadot started buying users. Referendum 1783 — executed at 87.7% aye — spends $3,009,600 of stablecoin on incentives for people verified by Project Individuality, Polkadot’s native ZK proof-of-personhood: $200/$100/$50 for the earliest joiners, up to ~$10 a week for useful governance participation, and the bulk into a weekly draw of roughly 140 prizes of $250.

That last one is the important one for us, so we’ve written all three into the RFC as a new §3.5 — What Polkadot chose, and why Kusama should choose differently, along with a seventh objection (“Polkadot already does this — copy Individuality and airdrop instead”). A document arguing about treasury strategy that ignores what the sister network just decided isn’t worth reading, and this one was missing it.

:point_right: Should Kusama Spend Its Treasury Onboarding Members Instead of Selling KSM? · Birdbrain RFC

Where we think it leaves the argument.

Polkadot and this RFC agree on the diagnosis: a treasury should stop buying projects and start buying people. Worth saying out loud — the position isn’t heterodox any more.

They disagree on the instrument, and that’s the part worth debating here. Polkadot pays individuals in dollars for proving they are human. This RFC pays in KSM for a collective to hold a membership.

  • Direction of the money. Theirs goes out, as stablecoin, to individual wallets. Ours moves sideways — KSM between public on-chain accounts — and returns as gas, co-payment and fees. For a network whose treasury is denominated in its own token and which has no stablecoin reserve to hand out, that isn’t a stylistic difference.
  • Unit of onboarding. An airdrop recruits atomised individuals, and a cohort attracted by a weekly draw is the hardest cohort there is to retain. A collective arrives with its economic activity already attached.
  • What the spend leaves behind. A balance, versus an account in a community that owns its own books and data.

And the honest counterweight: their check at the gate is better than what our join path runs today. Proof-of-Ink and Proof-of-Video-Interaction are a stronger uniqueness proof than passkey attestation and an attendance record, and we’d rather say that than pretend otherwise.

What we’d resist is reading that as the end of the question. pallet-people doesn’t verify personhood itself — it’s a registry (verified humans, rings, per-context aliases, proof validation) and it deliberately outsources verification to pluggable mechanisms. Proof-of-Ink is one of those, not the system. And two things sit above a registration check that a registration check can’t supply:

  • Uniqueness isn’t attribution. Ring-VRF aliases are unlinkable across contexts by construction. Excellent privacy, and structurally unable to carry the value of a contribution back to the person who made it — which is the whole point of paying people for what they contribute.
  • A one-shot proof is a one-off cost. Pay for the ink and the video once and the identity is permanent and free to operate forever. A proof derived from continuing, witnessed participation gets more expensive to fake the more it’s asked to claim.

So this isn’t an alternative to Individuality — it assumes something like it underneath. Which is also why Kusama rejecting the native proof-of-personhood pallets in #612 at 42.1% aye reads to us as the wrong call: that layer is a prerequisite for anything built on top of it, not a competitor. If it comes back, we’d support it.

The thing we’d actually like a view on.

Polkadot resolved its monetary question. Kusama has rejected every attempt to resolve its own — burn-based tokenomics (#627) rejected at 28.2%, halving and maximum supply (#625) timed out at 8.2% — while inflation runs near 7% and the burn sits at 0%.

This RFC deliberately isn’t a monetary proposal. No cap, no curve, no burn. The supply-side reformers are working supply; the validator-set reformers are working cost; this is the demand side — what the KSM the network already holds should buy. We read those three as complements rather than competitors, and the network could adopt all of them.

Does anyone here read that differently? And the original question stands, sharper now there’s something to compare against: what should a first rule-bound envelope be for?