On the Compensation and practice of DAO in the New Working era

21-12-06 11:36

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A Big Test for DAOs: Honing New Compensation and Contribution Practices

Originally by Spencer Graham

Block unicorn

As we usher in a new era of work with DAOs, many projects face similar challenges in identifying an extensible formula to compensate their contributors. What works when there are only five core contributors may not work as the community grows, and what is best for measuring and rewarding contributions in one DAO may not work in another.

Many DAOs currently benefit from the flexibility they can provide to contributors. Compared to traditional companies, individuals can move flexibly between DAOs, often contributing to multiple DAOs at the same time. While this flexibility attracted many contributors and was one of the factors that enabled the DAO to attract top talent, it often left contributors navigating multiple compensation structures. To continue bringing in new contributors, DAOs need to develop compensation mechanisms that work well with other DAOs.

While liquidity is attractive, some contributors feel most productive when they focus their efforts on a single DAO. As the DAO space begins to recognize burnout, which can split the focus on many projects in the dry, DAO should create ways for contributors to engage in longer-term commitments, and even encourage and motivate commitments as ways to retain their talented contributors.

What really shines about DAOs compared to traditional companies is that they can support many contributor participation models at once.

Daos must ensure that rewards are commensurate with the value created, and their non-hierarchical nature poses challenges to measuring that value, especially across time as contributors learn and grow.

Contributors thrive when they can move from project to project and contribute where they are most inspired; Others are likely to thrive when they can delve into a project without interruption. Still others want something in between. The real shine of DAOs compared to traditional companies is that they can support many contributor participation models at the same time, allowing contributors to choose the model that works for them. However, designing a compensation plan that promotes contributor choice while remaining fair, transparent and manageable remains a challenge.

Flexible compensation plans

At DAOhaus, we have been grappling with these challenges for more than a year. Based on our experience as contributors to our own DAOs and what we have observed in the multiple DAOs that use our platform, we have developed a set of principles for creating adaptable contributor compensation plans: & NBSP;

1. Contributors should have flexibility in how they interact with daOs.

2. Contributors should have flexibility in how the DAO compensates them.

3. The contributor participation and compensation model should interoperate with the models of other DAOs.

4. Contributors should be evaluated in a bottom-up manner.

With these principles in mind, we also developed a template for a flexible contributor compensation plan that divides compensation into three levels: base compensation, bonus compensation, and ownership.

The basic compensation

This layer offers the greatest opportunity to build flexibility for contributors in terms of participation (Principle A) and compensation (principle B).

For participation flexibility, daOs can create two tracks for contributors. A track would retroactively compensate contributors based on the value they created for the DAO. Common mechanisms in this area include retroactive funding proposals -- contributors outline the value they created during that period and make corresponding funding requests to the DAO or its working group, as well as awards. This track creates maximum flexibility for contributors, but creates more uncertainty for both contributors and DAOs.

The second track will compensate contributors consistently over several months based on the combination of their level of commitment to the DAO during a given period (measured in time, effort, priority, and so on) and the amount of value they expect to create during that period. Other members of the DAO (or contributors' working groups) will be responsible for reviewing contributors' commitment and value level proposals just as they review retroactive funding proposals. This track gives daOs and contributors more certainty about compensation and contributions, even in cases where specific DAO activities are less certain.

Daos must ensure that compensation is commensurate with the value created, and their non-hierarchical nature poses challenges in measuring that value.

In addition, because commitment levels can be expressed as percentages, as more DAOs adopt this approach, contributors will increasingly be able to reliably represent their total bandwidth and commitment across multiple DAOs, helping to promote compensation interoperability (Principle C).

为了补偿的灵活性，拥有多样化国库的 DAO 可以让贡献者选择他们想要的稳定币和 DAO Token 的组合进行补偿。例如，一个贡献者可以选择以 90-10 的 DAI-$ Token 组合获得补偿，而另一个可以选择 50-50 的组合。

DAO 还可以尝试各种机制来长期保留贡献者并建立长期的激励机制。例如，归属/锁定 DAO Token ，为更长的承诺期添加乘数，等等。

Bonus compensation

The allocation of bonuses is based on inter-subjective evaluation: each contributor evaluates the value created by other contributors during the period by assigning points to each contributor they have worked with, and aggregate the results to inform the allocation of the bonus. All contributors on the track of traceability and commitment are eligible to receive prizes and participate in intersubjective assessment activities.

这一层有两个关键功能：第一，它是一种奖励超越的贡献者的方法，就像典型的奖金一样，创造更多价值的人获得更高的奖励。与典型的奖金不同，该金额由贡献者的同事和共同贡献者而非老板决定。在可能的情况下，奖金应以 DAO 的 Token 支付，以与追溯跟踪贡献者（其基本工资通常主要是稳定币）建立长期联盟。

Second, the results can serve as a decentralized, bottom-up performance review of contributors on the commitment track. By comparing the expected value of contributors during a given period, as measured by their share of total base compensation, to the actual value they created during the same period, as measured by their share of the inter-subject assessment results, the DAO can assess whether contributors underperformed or excelled.

The main tool for inter-subjective assessment is Coordinape. Daos can experiment with various policies of the mechanism, including how many points each contributor should give to others (influencing how much weight each contributor should weigh in determining results), how big the bonus pool should be relative to basic compensation, and so on.

Administrative power

Contributor ownership makes daOs more powerful than traditional companies. For sustainability and continued decentralization, DAOs must provide a clear path for contributors to gain governance rights in DAOs. One of the best ways to distribute rights and ownership is as part of compensation.

确切的方法因 DAO 而异。由 Token 投票直接管理的 DAO 可以通过向 Token 中的贡献者支付基本或奖金补偿来实现这一点。相比之下，具有非令牌治理机制的 DAO（例如 Moloch DAO）在如何将所有权和治理权分配给贡献者方面有更多选择。

例如，这些 DAO 可以补偿 DAO Token 的贡献者的基础和奖金，但通过社会强制规则限制贡献者只能获得奖金部分的治理权。

The benefit here is twofold: First, contributors gain governance in the DAO, only in proportion to the value they create for the DAO as determined by their peers through inter-subjective assessments. Second, contributors to both tracks have equal access to governance.

Flexible pay is the future of work

In the future work, the worker is in charge. Together they control what the organization does and how it does it. Individually, they are autonomous; They control their priorities, how they work and with whom they work. Daos are the future of work because they make this possible: they are managed directly by contributors and can create space for contributors to participate as they wish.

To fulfill their promise, DAOs need to develop flexible contributor compensation plans and the ability to effectively evaluate contributions in a bottom-up manner. The above template is just one approach. Even within this template, there is plenty of room for the DAO to experiment, learn, and iterate. In fact, experimentation is crucial to discovering which mechanism works best for each DAO. No DAO is fully formed; They all have to evolve and adapt as scale and conditions change.

If the DAO can successfully implement flexible compensation plans for contributors, I suspect we'll find a lot more talent and talent in the world than we currently think. Companies today are terrible at finding talent and attracting/motivating talent to their businesses; It's early days, but DAOs have already demonstrated their strength in this area.

What's more, with DAO contributors empowered to drive their own contributions, we may discover entirely new things that are valuable to others, and many are very talented at producing -- some of which may not look like "work" at all! The future was dark, but DAO made it brighter and brighter.