Compensation Structure for DAO Contributors

One of the friction points in contributions to the DAO has been the lack of suggested structure for how contributors are compensated. There have been some functional practices, but not terribly well defined, and we’ve seen proposals take on a number of forms. Currently, we have two forms that actually work well:


A team performs work, submits a request for reimbursement, and it is evaluated by the DAO and voted to approve or reject. If rejected, the team may resubmit, incorporating feedback that came with the rejection.


The DAO/Foundation approve a budget for a line of bounties with a clear deliverable and guardrails, and accepted contributions to the bounties are paid out according to the reward set.

There have also been a couple of proposals along the way which have been rejected or viewed negatively, partially because of the structure of compensation requested. This includes having the Foundation stake nodes for the proposer, or a “salary” type structure with work being broadly defined without specific deliverables (economics analysis, design work).

And, we’ve had short term small cap service proposals like Reddit marketing or translation services which stride the line between the two.

I would like to open a conversation here about reducing that friction with some standardized guidelines around the following:

  • Appraising work performed, both in reimbursement for past work, and in assessment of estimating future work (building on @shane 's value model). This also needs to account for regional cost of living variances, as work performed in Los Angeles is far more expensive than work performed in Bangalore, for example.

  • Determine a standard term for forward looking work (@TheDoc 's 3 month term seems to have been palatable to the DAO), and standard practices for evaluating the work performed during that term (there is potentially some specific expertise needed to evaluate the quality of work performed, and the impact on the protocol/DAO/community at large depending on the work performed).

  • Streamline the creation of new bounties with clear deliverables for recurring service providers with discrete offerings (economics, translation, design, development, etc.). Given what we’ve seen with content and development bounties, this seems to be the most frictionless way to get specific contributions accomplished, and comes with the flexibility to adjust bounty rewards as needed.

@JackALaing 's PEP-16 proposal a little over a year ago was a step in this direction, but never moved forward due to its reliance on Coordinapes, but now that we have Dework, I think it bears further conversation.

I would love to this conversation result in a published set of guidelines (perhaps with some snazzy editing and graphics from @zaatar , @Cryptocorn , and @Ale_dVG ) so that new contributors to the system have some sense of how to quickly and easily participate, and so that existing contributors aren’t tasked with the high friction job of trying to determine an economic structure without guardrails.


I too would like to see a successor to PEP-16 with the inclusion of our larger community, since it has grown significantly and there are many more contributors.

I’m not for ascribing value to contributors in an arbitrary ways (which I’ve been vocal about many times). I am though hopeful that PNF will help lead/organize the community in this area :pray:


I definitely think that we should have more structure around who gets paid what, when, and so very much agree that the community should have a full discussion abou this, propose solutions and try to find consensus.

A few personal thoughts, I’ll start with the fact that I am currently asking the DAO for reimbursement and have been rewarded bounties in the past, so a) I may be biased in my opinions, take them with a grain of salt, b) I’m also the target audience for these changes.

  • I think the bounty program is good as members know what the work is and how much they will receive. Extending our bounties into larger pieces of work with higher price tags I think should be encouraged, but with detailed description of the work to be performed, milestones added and either a PNF member or third party with appropriate expertise to review work and sign off milestones. We’ll probably also need to set up a mechanism for appeals by a credibly neutral outside party in case of issues and disagreements.

  • I disagree with paying by geography. (Caveat- I spend the majority of my year in a low income country). However- firstly, I think this goes against the spirit of web3- the whole point is that you are anon penguin and get paid for work done, not where you happen to live. Secondly, this assumes no one travels. For example, I live in a low income city, but I spend several months a year in one of the most expensive cities/countries in the world. Do we start making formulas for how many days lived in certain areas in the last tax year? Obviously I’m being facetious here, but unless the job is based in a certain geographic area full time, I’m against geographic constants added to salary. If someone submits 10/10 work, they should be paid appropriately, not the same as someone submitting 5/10 work but living in a different jurisdiction.

Having said all the above, I’ve spent 20 years outsourcing work to lower income countries and I’m quite aware of the benefits + pitfalls. I’m all for PNI/DAO/PNF approaching suitable vendors in lower income countries to do specific work.

So I’d suggest some kind of hybrid system where the ‘pull’ work we set as bounties or vote through proposals making X request for compensation. The ‘push’ work where ‘we’ get a suitable vendor can look for an appropriate level of skill at a lower price largely based on geography.

  • I’m impressed with Shane’s formula for compensation and his vocal dedication to pay equality. I’m someone who stands to gain from this implementation. However, some commitments are just more valuable even including the constants and multipliers included. Good tech people can charge several hundred dollars+ an hour and we shouldn’t bring everyone’s starting commission up to their level or vice versa, try to get tech people to work for less than market. Blade made a good comment about this in relation to IDEAS/RAD, that he might do a small bounty for fun or if he liked the challenge at $50/hr, but he wouldn’t take on major work at this rate- so we need to be able to incentivize the gigabrains to work for Pocket without being too reckless with budget.

I would make an opening suggestion to use Shane’s formula, but have several ‘buckets’ of base salaries- so $120/HR for tech work, but $50/HR for marketing etc and then add the other multiples.

  • we could have a person or team responsible for giving estimates on compensation when hours are less well defined. Using myself as an example - I didn’t track hours I’ve spent in Pocket over the last year for PEP-51, and even then, do I charge for just being in the Telegram channels and chatting to buddies and shitposting? No. But, interspersed with that is also helping a newbie or adding to important debate. So it would be harder to use Shane’s formula and as such one has to guesstimate. I got it wrong to my own detriment. Additionally, I don’t know about others, but I almost feel embarrassed to ask for too much, having a formula or committee gets people paid the right amount and should signal to the community that the number requested is sensible and has been scrutinized.

  • The above reasoning is why I don’t like big reimbursement projects. People may over or under value the ROI of what they are working on, and it sucks to not get paid after serious work. I appreciate people can resubmit etc, but it’s fractious, politics and personal friendships get involved etc etc.

Hope that helps with thoughts on first steps to creating better guidelines for compensation, it’s an important topic and it needs to be thrashed out by the community.


I’d like to add another form of payouts -



I am newer than most of you and therefore I can’t relate with the past. History is important but also comes with “baggages”.

Here are my observations/recommendations on this subject-

TLDR- There absolutely needs to be a defined structure for any recurring type of DAO expenses, and that includes paying builders, contributors, etc. I think there is consensus here.

I suggest starting on a blank sheet and then decide what from the current and the past “deserve” to be continued in Pocket that is today and Pocket that is going to be. There are best practices that deserve continuity.

But nothing and nobody should gain precedence just for convenience sake and for “entitlement” sake. We need to be “forward looking”, there needs to be fitment check and we shouldn’t hesitate making big changes if needed.

That takes us to the next few points that are little edgy -

eBay once had “people are basically good” in their list of values/principles.

Google had “don’t be evil”.

Those were replaced. Those are contrary to basic human behaviour of working in self-interest.

We have to assume that there will always be a few actors who will be here to “MILK THE DAO”.

With that assumption, we have to create guard rails making the DAO treasury anti-fragile and uphold “CAN’T BE EVIL”.

Anti fragility is easy to quote (sounds cool) but very hard to implement.

And in this process if we lose a few incumbents, that will be worth it.

Valuing, compensating and rewarding good actors and worthy contributors is one thing, while creating indispensable choke points is another. We do not want the latter and I can see that happening.

“Defend against Pocket’s attack vectors: proactively identify and neutralise attack vectors, protect the DAO’s checks and balances, and eliminate central points of failure”- PNF

I appeal to @JackALaing , @Dermot and @nelson to uphold the above. Now is the time before it gets late. You will have support from the good and rational actors in the community working in the interest of the DAO and the protocol.

Not saying this to sound sensational for no reason.

With upcoming inflation cuts, POKT allocation to the DAO treasury will reduce accordingly- just wanted to remind everyone.

We need individuals with finance and business acumen involved in managing the DAO treasury, payments and budget planning. Using PNI’s example- Pocket probably wouldn’t be here without Mike but at the same time if Lax had joined a year ago, PNI probably would have been in a better shape.

Core competencies matter!

There shouldn’t be knee-jerk payments (especially large ones) because of pressures and historical connections. We need to look forward.

I suggest working on a plan, and until then we halt any payouts that are not already in the voting stage.

We can deal with the specifics such as COLA, rewarding volunteers who contribute meaningfully in community spaces, proactive payments, and others raised by @Jinx , @Cryptocorn , @ethen in the plan.

I have experience creating large multi-geo incentive, reward/recognitions programs, dealing with abuse, frauds and disputes around them at boomer institutions including in one of the MAGAs. I might volunteer to co-author the proposal if we go that route.


To be clear on this, I’m not advocating for paying people differently, I’m looking for input on how to price things appropriately in a global market. This is something that Ming and I chewed on while putting together the Ambassador and Regional Hub programs; I want to avoid having everything be Los Angeles priced, as that’s a recipe for a rapid depletion of DAO funds.

I like this approach.

I also like this suggestion. Perhaps if a range can be defined, a median price tag can be derived from that?

Agreed, which is also why I like the bounty system for discrete deliverables which allows for specific requirements and guardrails.

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I believe you’re referring to something like seed grants, which I also agree can be a useful compensation structure.


I absolutely love this, and welcome it.


Something else we’re missing is a “bid” process, to get quotes from third party vendors for professional services. I think this is critical in assessing pricing structure. @Ming thoughts?


It’s an interesting suggestion, and might help encourage more involvement from the community to step forward with their ideas/proposals for a particular larger/higher spend task. If I recalled correctly, we have community members that in their private work, understands these types of process well, especially if working within the government sector, which this is the norm. Would love to hear their thoughts of this process as well.


Establish builder RFP process – enabling anyone to pursue work on areas we have identified as opportunities (e.g. protocol upgrades)

The above is from PNF’s goals, and I agree. There should be RFP invitations to the community and to vendors outside, basically open to everyone. That’s typically how it works in vendor sourcing and management in all large organisations. Adds transparency and maximises value (cost and quality) for the outsourcer.


No, I’m specifically talking about Imbursements. Like what PNI did.

If there is a 4th category, I’m sure you can make a case for that. But I don’t see how that is different than imbursements. And I personally refrain from complicating things.

Reimbursement and imbursement are listed as synonyms in the thesaurus, so I was driving towards some clarity in meaning, since you’re differentiating.

PNI’s proposal on its face strikes me as a reimbursement, but I could also see how it would be interpreted as a grant. What’s the specific difference you’re highlighting?

I think we could use Grants, but i like Imbursement as it works well with Reimbursement and is an allocation that has yet to be earned, whereas Reimbursement is for work already completed.

Trying to simplify the process here.

The work PNI did last year had already been compensated in tokens and in USD. I would definitely not see that as a reimbursement.

Got it. In my mind, that kind of structure would already be covered under bounties, or with RFPs in a bid system.

What benefit do you think an imbursement brings versus a bounty?

Bouties to me don’t feel like we value our builders enough. Imbursements feel like we are signing a player to a longer term contract. It’s a mutually beneficial longer term agreement.

See this thread here:

We just need to figure out who the players are. I’ve spoken to my team. Don, BigBoss, and Dire want to contribute long term to the success of Pocket Network.

The twitter thread you’re referencing is speaking about hiring a team of FTEs. That is not what the DAO is doing. Locking in long term compensation commitments from the DAO instead of putting specific tasks out for the community to contribute to creates a monopoly on participation, something we’re actively in the process of ending with PNI. I don’t see a benefit in expanding a system that so many, including yourself, have spoken against already.

It also potentially creates bottlenecks, in that if none of the teams in question have bandwidth to complete a task, and there isn’t room in the budget based on those commitments to bounty out a task, that leaves the DAO locked in place.

I agreed with many of the points @shane brought up in the other thread, and first and foremost among these is that our goal is in building MORE participants, not less. And with the ongoing reduction in total pokt minted, the DAO’s budget is only going to get tighter.

Given your very vocal desire to increase builder participation, I’d think you’d understand the risk making that a dominant structure creates.

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The DAO needs to hire full-time people. Specifically and possibly only engineers should be hired full-time.

I disagree with a lot of the way you think about bringing on and compensating talent. I’m sure I disagree with a lot of people on that. A lot of builders have already proven themselves. It’s a damn shame PoktBlade is not free range working and being paid a monthly stipend already. Same for Ramiro. I sure as hell don’t need to be overseeing the work they do. BigBoss is already working towards ledger integration. Who are we to tell him what to work on.

Who is putting putting out the tasks?

When LeanPOKT and Geo-Mesh were built do you think the team was thinking about tasks? No, the brightest minds saw a problem and got to work.

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In terms of protocol development, @Olshansky is. And he outlined in your other post about the need for structure on that. and @h5law has shown how effective that can be, turning in a number of bounties for reward. This is a very agile approach to development that works similarly to how dev orgs I’ve led in the past work.

Innovative solutions based on R&D work well with reimbursement. Specific tasks associated with moving the protocols forward work well with bounties (and any agile dev is familiar with kanban boards and the like, which our dework system mimics).

The DAO does not have the budget to assume the overhead of full time engineers, and I don’t see an effective way for them to be managed. The Foundation can have full time employees, but they have a specific mandate, and supervisors in the Directors. In a development organization, there are specific architects and leads who provide oversight for dev work, who are hired based on their expertise in that space. The Foundation Directors are not dev or devops or architects, so would be ineffective in managing that workflow.

Daniel has made clear that “too many cooks” in the path to v1 is a recipe for disaster. The biggest external contributor to v1 to date has had zero issues working with the bounty system. While it’s clear you disagree with my perspective, I have yet to understand the reasoning why, since we have the architect of the project saying it needs to be tightly managed on a task basis, and we have participants using that system effectively.

Many of us in this ecosystem (yourself included) have performed freelance work in the past; I’ve personally worked freelance on multimillion dollar projects that stretched out over the course of a year. The entire FOSS movement has shown that there’s no need for an FTE structure to accomplish major things (Linux is perhaps the single greatest example of that). And having managed devops orgs in the past, capacity planning and utilization is one of the greatest challenges with FTE engineers, given the cost to benefit ratios of one of the most expensive resource classes in the org.

I see that you disagree; I just don’t understand why. All of the available evidence points to the bounty approach being both well managed in the way that Daniel needs, and an easy route for new contributors to immediately begin participating, like Harry has.

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Love the concept. What does the DAO need done right now? Just like with any hiring position, there first has to be a job description, with milestones and accountability. I think listing the responsibilities and deliverables is the first step, instead of hiring first and then figuring out what they want to do later, or if what they are working on is valuable to the DAO.

When you break it down, you and @Jinx are actually talking about the same thing. Regardless of if it’s a full time hire, or a bounty, both require having a list of tasks that need to be performed. The method on how the payment works is where you differ, but having the deliverables and accountability is required regardless.

Would Poktblade walk away from his very successful hosting business to instead get his paycheck from the DAO? Is that something he wants? Or would Ramiro step away from POKTscan to only work for the DAO?

If they want to work full time for the DAO, then we would welcome a proposal that outlines what they will work on, what the milestones will be, and how there will be accountability. Hopefully PNF will help streamline all of this, but the first step is the dev needs to want to work for the DAO in a transparent manner.

I’m not following this concept if having the DAO give people stipends, without a roadmap and laying out what they are working on… when they already have businesses in POKT’s competitive ecosystem.

Exactly! That is a great example of a dev who sees something that needs attention, and the DAO can reimburse when it’s successful, or PNF can help ensure progress is being made if it’s an imbursement with milestones. Perfect example how any dev, including all the devs you frequently mention, can do work in the DAO and get paid for their contributions.

Many devs projects have been funded WHEN they submit a proposal the DAO can get behind… so there hasn’t been any hiccup with that system thus far. It worked out quite well actually, though there are barriers to entry that PNF is committing to address. I don’t however understand the concept of this system of just paying folks, because they are a dev in the ecosystem, and trust that those funds will go towards benefiting the ecosystem, when they already work for companies competing in the POKT ecosystem. Some have mentioned concerns with PNI and conflicts of interest in the past, yet this new method of paying devs as free-range, without specific tasks, would make ignoring obvious conflicts the default stance of the DAO. I can’t reconcile how that scales.

Do you know of a DAO that has a successful program of funding developers in this manner?