PEP-16: Universal Contributor Income

Attributes

  • Author(s): @JackALaing
  • Recipient(s): Contributors
  • Category: Allocation of Future DAO Revenue
  • Related Installments: PIP-8
  • Asking Amount: 20% of Future DAO Revenue

Summary

At the moment, the only way that Contributors can get paid by the DAO is by submitting grant proposals to fund their work retroactively. This means that contributing to the DAO requires taking on a fair amount of risk and opportunity cost. I believe that distributing a fixed % of future DAO revenue on a monthly basis would provide Contributors with more stability and ultimately engage more Contributors overall. To start with, the distribution of this revenue would be determined by Coordinape.

Motivation

Provide Contributors with more stability so that more of our community can engage at that deeper level.

Specification

  • 20% of future DAO revenue would be paid monthly to Contributors. If my math is correct, last month this would have been a total of 221k POKT being distributed.
  • The distribution of this monthly payment will be determined by the distribution that Coordinape’s P2P tipping system generates.
  • Payments would be made via wPOKT to integrate more seamlessly with Coordinape and minimize transaction bloat on the native Pocket blockchain. This would mean we can’t make payouts until wPOKT is live but we will be able to keep a record of how much is due to be paid out and to whom.

Rationale

  • Incentive Alignment: by giving Contributors a fixed % of future DAO revenue, we tie Contributor payouts to the number of relays in the network, which aligns everyone’s incentives around the core objective of growing the network.
  • Frictionless Allocation: Coordinape determines payment allocations continuously based on P2P tipping decisions by members of a Coordinape Gift Circle, which will be far more dynamic and frictionless than discrete grant proposals.

Dissenting Opinions

  • 20% may be considered too much. If people feel this way, we could start with a smaller % and increase it as the number of Contributors increases and the system is tested out.

Viability

  • Coordinape is easy to use and works out of the box.
  • wPOKT is not live yet, so we would need to keep track of monthly distributions until wPOKT is live.

Implementation

  • Start using Coordinape per PIP-8.
  • Implement monthly payments when wPOKT is live, with the specific tooling (e.g. Gnosis Safe) depending on whichever is most easy to use in combination with Coordinape.

Copyright

Copyright and related rights waived via CC0.

4 Likes

I support this PEP. I think that the guarantied payment to Contributors will attract lots of more developers which will help develop the ecosystem and set a precedent for funding good work. It also increases decentralization of the network because there will be more contributors outside of PNF/PNI.

1 Like

I support this proposal.

A couple of caveats:

  • Obviously, the Coordinapes proposal would need to be passed. In researching that system, there were concerns voiced that the reward mechanism favors people who have been rewarded in previous cycles, and that it could lead to gaming of the system by insider cliques who pass rewards back and forth to each other. I’d like to see how this will be mitigated, but will comment more on PIP-8.

  • I would like to see some sort of taxonomization of contributions with potential multipliers. For instance, “funny Pocket memes” might generate a number of Coordinapes tips due to comedic effect and general goodwill, but is not as valuable to the mission of Pocket as a core update PR which addresses a serious security issue. A tier system which uses a multiplier based on DAO priorities may address this, and I’m open to other suggestions.

1 Like

I have a lot of :heart: for this proposal

Coordinape is a fantastic tool for both DAO administrators and contributors. It’s fun to use and have a say about what your fellow contributors should receive for their impact in the previous period.

My only initial hesitation is around the quantum per month.

20% of DAO revenue per month seems like the right sum intuitively in the medium term when there are 20-30+ (or hopefully many more) active contributors. It seems to be too high initially though.

For example, how many outside contributors would we expect to include in the first epoch? And what kind of work do we want to reward/incentivise?

Could we agree this proposal, but on the basis that the monthly (or whatever length of time we choose) pot that this will be reviewed based on the number of contributors and the overall impact that they’re providing?

This could be delegated to a new remuneration committee / multisig to review and report back to the community on using some of the “constrained delegation” ideas on Yearn’s Gov v2 framework.

2 Likes

Reposting according to @Jinx 's reccomendations

1 Like

I was wondering if awards could be

  1. Based on the difference in reputation through a period - mitigating this reward the rewarded.
  2. Vested or delayed. Creates long term incentive alignment as well as allows for a negative reputation to remove rewards that would have otherwise been distributed.

For this see my comments on “Value the demonstration of the Values”

1 Like

I don’t expect to see this proposal updated with a specific taxonomic system, but I would love it if @JackALaing was able to update it to include a reference regarding tiered rewards if it’s both feasible with Coordinape, and a generally agreed upon requirement. I share @Patrick727 and @Dermot 's desire to make sure that rewards flow to where they are most valuable, and a flat economic system doesn’t allow for internal weighting of the value contributed.

I would like to specifically exclude public short form content like memes and tweets, as we can reward useful/successful content of that nature directly via PR initiatives like some of the proposed content reward models.

I think I would propose the following categories and multipliers:

  • Documentation - This would include updates to Pocket technical documentation, long form tutorial blog posts or videos, and other similar content: 1x multiplier.

  • Population - Broad scale PR/Partnership efforts which result in a notable increase in Pocket Wallets, Nodes, and Relays: 3x multiplier.

  • Innovation - A significant improvement to the Pocket ecosystem via a direct contribution to Pocket Core, or supporting Pocket tooling (projects like Poktscan, Poktwatch, Sandcrawler, etc.): 5x multiplier.

Obviously, this structure reflects my own perspective and priorities for Pocket, so I offer it only as a starting point for further conversation on relative weighted values.

2 Likes

@Jinx @Patrick727 the good thing about having the voting coming from other contributors is contributors are by nature much more level headed than the majority of the community. I’ve worked in a DAO where my paycheck was indeed paid by the DAO each month via a vote… and when you are in that kind of environment, no-one likes to give flashy contributors free rides. You undermine your own value if you allow others to get paid for less substantial value add. By nature contributors are the least likely to be easily swayed.

The contributors are the closest ones to the productivity of the project, and with that comes a perspective and they will require a lot more convincing to just give resources to those who do not produce value.

While theoretically it sounds like it’s gameable in this manner, it wouldn’t play out like that. Contributors in a DAO are the least likely to be fooled out of the entire system. Because contributors are the voters here, that is why I actually agree with this. If it was down to solely community voting on each contributor, I would not want to go down that road again. It is terrible :joy:

3 Likes

I think Shane nailed it here. The power of Coordinape is that it empowers those closest to the decisions to decide on the impact they view as the most valuable to the community. They don’t vote on everyone, just those they viewed as contributing, or worth enough of their limited number of “Give” tokens for that period.

You only get into a system like coordinape once you are “vouched” for, ie you align with the values and we expect you to be additive to the culture, so I see Coordinape more as a reflection of our culture, not necessarily the way to embody it.

Community members directly recognising each other’s contributions should lead to a more cohesive and productive community. The anecdotal evidence from the Yearn, Gitcoin and Bankless DAO communities would suggest that this is true.

Boots on the ground will always be much better at calibrating in real-time the activities that are most valuable to the community. I’m really excited by more localised decision making in Pocket. The alternative is a static system of categories and multipliers that may have to be updated and voted on every month or two to stay relevant. It’s scary to give up control, but we can only see the true power of the DAO once we do so.

The Coordinape system will need to be calibrated to best reflect the shape and culture of Pocket’s community. This relates to questions around the size of the pot, the length of each epoch, the dispute system in the event that anyone feels undervalued, and so on.

To respond to one point - I don’t expect insiders to just vote each other up as that will all be very transparent and will lead to a discussion if community members believe someone - or some class - is getting rewarded unfairly. Behaviour like this would justify getting kicked out of the contributor circle IMO, particularly as trust is at the heart of this mechanism. And without it, the vouching system and everything connected to it won’t work.

I see the ideas around Universal Contributor Income as an open experiment that we all have the opportunity to contribute to and help make it a success. Although, I really like Coordinape. I’m not wedded to it as the platform of choice. I most care about the change in direction towards a more empowered community with decisions made by those closest to the matters at hand.

To go back to the points from @Patrick727 - our values are signals that guide the way. They help us in our decision making processes - what to prioritise, who to hire, what trade-offs to weight- and ultimately attract and retain our community. They are essential to the intrinsic motivations that power the Pocket community. They also influence the how, what we all do in practice - our culture. I really like the incredible work done by the core Pocket team to define and embed the current values. And I’m also looking forward to see how the growing community of (Poktopusses??) help shape and evolve these values over time.

As a starting point on Pocket’s journey to true decentralisation, I believe that empowering Pocket’s contributors to decide what impact they value most is incredibly in line with many of Pocket’s currently stated values:

Be undeniable - it doesn’t matter who you are, where you’re from as long as you (love me - sorry those lyrics just came to my head :grimacing::joy:) do the work. Make an impact, however big or small, and get rewarded. If your fellow contributors don’t value your work then that can be pushed up the chain to see if the kind of work in question actually lends itself more to a formal contract with a fixed role and set of responsibilities, instead of the looser role of a DAO contributor.

Celebrate open source - open source works so well because it’s bottoms up - why not the same for a rewards structure?

2 Likes

Great comments by everyone have resolved any concerns I have.

2 Likes

@JackALaing @Jinx I had brought it up before in the Treasury diversification proposal. One way of doing this will be to use KPI options. They can’t be gamed and could be rewarded to active community members through a tier-based system based on the contribution. These can be redeemable based on the extent of the underlying metrics having been achieved.
Rather than paying DAO revenue to the contributors, KPI options could be paid which would have a certain value based on the redemption metrics. The risk and the opportunity cost can be pre-defined with a base value for the redemption of the options. It can lead to contribution and drive the entire community together.

1 Like

Correct, I am for testing with this distribution mechanism using coordinape as a tool.

What I am advocating for is that the thing we most value I believe should be the values themselves, because we are optimizing for decentralized autonomous organization.

For all of the reasons stated above and with all the necessary updates needed to achieve both impactful outcomes but the more harder to solve pitfalls of strictly outcome based systems.

While in Miami this past week.

I was with some of the team and we did an on-the-spot interview/exercise with a colleague, one thing that was said that is worth mentioning here.

“The thing we look for in hires the most are 1. Dedication/Energy 2. Capacity to learn”

p.s Don’t quote me on the exact wording, but it was along those lines.

Although it runs the risk of overengineering up front.

I like the idea of the KPI options being a multiplier on top of a base “demonstration of values” reward system. That way the KPIs inform the what, and the Values inform the how.

1 Like

We prefer “Poktopi”. :rofl:

1 Like

This was how I originally thought it worked but, as far as I can tell, each epoch is actually isolated. Every contributor receives an equal amount of tokens to allocate at the start of the epoch, regardless of their “performance” in the previous epoch.

1 Like

Yeah, after additional reading, I don’t think that’s a risk anymore.

Addressing concerns about the kinds of contributions we are valuing

Philosophical Misalignment

Firstly, there’s a philosophical misalignment that I’d like to highlight here. I think clarifying this will help set the context for the rest of my answer.

My view is that the governance mechanism should be neutral to outcomes, empowering participants to impart their own localized value judgments, rather than trying to enforce monolithic value judgments.

Coordinape alludes to this in their docs:

each member should allocate their GIVE tokens to other members using whatever logic that makes sense to them with the goal of making sure valuable contributions are recognized and compensated as accurately as possible.
The goal is not to share money equally, give from obligation, or to pay people for spending time within the organization (unless you think that is valuable).
…
Try not to allocate GIVEs based on who is “supposed” to get them, or based on hype. Give them where you see value happen. Give them to people that help you.
Don’t worry too much about getting the numbers right, go with your heart.

We should trust each other to allocate resources sensibly. Given that this power is gated behind the vouching system, contributors can enforce their preferred culture based on who we permit to join the gift circle. If Pat believes we should reward each other based on how much we exemplify Pocket Network’s values, he can advocate for other contributors to reflect this in their gifting decisions, and if they agree with him they will do so, but we shouldn’t enforce it as a monolith.

As Shane & Dermot said,

If we go the other monolithic direction, we risk over-engineering the system, creating more friction and disenfranchising categories of contributions that we didn’t account for in our taxonomy. It will also be harder for us to calibrate when this inevitably happens. Look to the Pocket Arcade quest system, which doesn’t account for every kind of contribution, for an example of how hard it is to calibrate a system like this.

Dermot brilliantly echoes my views on localized governance here

I will generally be pushing for us to localize our governance more over time, for the above reasons and because I believe it is the only way for us to achieve true decentralization.

Functional Misunderstanding

In focusing on the value of specific contributions, we’re forgetting how Coordinape works.

GIVE allocations are not tied to specific contributions, which means we can’t exclude contribution categories or enforce contribution tiers even if we wanted to. And we don’t need to.

In a contribution-based evaluation system, like SourceCred, it’s easy to overpay individual contributions in isolation without realizing that this on aggregate results in the contributor being overpaid compared to another contributor who has less frequent and/or less sexy contributions. I believe this is the kind of outcome that Jinx and Pat are (were?) worried about.

However, Coordinape is a contributor-based evaluation system. Since we’ll be evaluating each other wholly as contributors, not evaluating individual contributions, I expect that this will help us to make sensible comparative value judgments with the full context of the impact of our decisions on the macro-level distribution of value.

Coordinape is not an “output-based reward system” (as Pat cautions against), it is a contributor evaluation system that is agnostic to whichever methods contributors use to evaluate each other.

Iterating on a Simple Foundation

Lastly, I’d like to provide more detail on how I envision this system evolving over time.

Coordinape allows organizations to have multiple circles, with their own epochs, tokens, contributors, and thus their own culture of value.

Rather than enforcing value systems as a monolith, we can allow localized gift circles to be spun up, with competing value philosophies, and request their own % of DAO revenue. These could be circles dedicated to specific types of contributions (satisfying Jinx’s taxonomy idea) or specific value philosophies (satisfying Pat’s “Value our Values” idea).

In the long run, the budget allocated to these competing circles can be calibrated by the DAO based on how successful they’ve been at fostering ecosystem value broadly. Calibrating this will be much easier than calibrating a monolithic value judgment system.

So I would suggest we start with a broad POKT DAO gift circle, see how that goes, then community members can spin up their own circles if they feel the POKT DAO circle is imperfect in some way.

1 Like

For the same reasons as I’ve outlined above, I believe that, for now, we should avoid introducing additional layers of complexity like KPI Options. I know you said in Discord that KPI Options are simpler than they’re conceived to be but the fact is they introduce complexity by virtue of introducing a new token that people need to understand.

They also enforce specific outcomes (KPIs) that must be calibrated over time, which as we’ve explored above is at odds with the neutrality that we want to have, and the localization that we want to foster, in a global (DAO-wide) system like this.

Who knows though, maybe localized gift circles will spin up, with their own value systems, and use KPI Options to pay their contributors. If these KPI Options circles demonstrate better results, then other circles will adopt the mechanism and eventually we may opt to apply the mechanism at a global level.

@Dermot, the points you made about epoch length and payment size made me realize we ought to clarify the parameters of this program, so I’m considering making the following edits:

Increase Epoch Period to Quarterly

Increase epoch period to quarterly, so that the value distributions more accurately reflect sustained contributions, the impact of contributions, and the long-term value of contributors as a whole.

Retain Monthly Payments

Keep payment period to monthly, where payments will be made according to the distribution of the epoch that ended most recently (not the currently active epoch). This allows us to do quarterly epochs while still maintaining the financial stability of monthly payments.

Delegate Monthly POKT Payment Amount to Target an Average $USD / Contributor, then Calibrate this Average

Rather than specifying a % of DAO Revenue, delegate to the Foundation the operational adjustments of the monthly payment figure according to the price of POKT and the number of contributors at the end of the previous epoch, so that the average contributor can be expected to make $2k/month.

Why $2k? I expect there to be a long-tail of contributors who provide relatively less value as a part-time gig. This system should still allow for high-value contributors to make significantly more, a full-time salary at least, but without attracting freeloaders who are only doing the bare minimum to claim their monthly stipend.

Let’s illustrate using last month’s figures:

  • 14 contributors (rough estimate based on current set of voters),
  • POKT price of ~$1,
  • DAO revenue of $108,700 (108.7M relays, multiplied by 0.01 RelaysToTokensMultiplier, multiplied by 10% DAOAllocation)

If we targeted $2k average/contributor, this would mean paying 25% of last month’s DAO revenue, or a total of $28k payouts in the month. In practice, I envision this looking something like ~5 of the 14 contributors each earning an average of $4k in the month and the remaining 9 contributors earning a share of the remaining $8k.

I’m unsure if this is the perfect way to determine the size of monthly spending so I’m open to alternative suggestions. There may be simpler solutions, there may be solutions that lead to a fairer distribution of value, or more sustainable solutions. I imagine that we would calibrate the average target based on how many contributors there are, how much DAO revenue there is, and how sustainable the program is based on what the % of DAO revenue is.

To ensure transparency, monthly financial reports would be published outlining the payments that were made and the calculations that determined those payments.

I’m not understanding your “last month figures”, since we did 108.7M relays per day, not per month. You have to multiply $108,700 by 30 days to get last months DAO revenue of $3,261,000.

I imagine a Contributor arm that attracts high-quality professions with specialties in software development, branding, design, video production, event management, technical support, bizdev, and community engagement. With a budget value of $2k a contributor, we will not reach any professionals and will likely see the contributor ranks filled with primarily Discord mods and those with entry-level skills. Quality contributors will only come if they see an opportunity to do better than where they are today, and with such a conservative approach will not scale to the quality folks we want to capture.

I don’t see any in the professional class wanting to ape into a budget/structure that targeted towards hobbyists. I see we have two narratives that we will ultimately fit into:

  1. Have you heard of Pocket DAO? They have a rather limited budget that contributors can share, but if you work really hard, you may be able to get the value of your professional skill. It may be a risk, but it could possibly be valuable in the long run if you stick with it.

or

  1. Have you heard of Pocket DAO? Right now they have a huge budget that is being paid out to contributors and early folks are getting amazing rewards for their work. If you produce quality work there, you will get 3x the market value while it’s growing. It’s definitely worth considering, even if it’s just part-time right now. Don’t wait to jump in.

If we have to choose between those narratives, I say we should lean to paying more for quality contributors than trying to ensure a USD value per contributor (especially if the budget is targeted towards hobbyist pay).

Example: POKTscan put in a proposal for $12k a month to maintain development. There is no way for POKTscan contributors to be covered via Contributor Income. The Contributor Income program is a great way for projects to dynamically scale because more devs can be added without having to amend a past static proposal.

@Jinx is another that I could see becoming a contributor. His value and what he is building is significantly more than even the $4k suggested for the highest contributors. Full disclosure, Node Pilot is considering moving from strictly a traditional proposal model to the contributor model… and we would not fit in this model either.

I do get that opening to more circles will address some of this in the future, but if we can’t even account for current contributors with our kickoff structure, then I feel we are missing the mark for the sake of trying to generalize the USD value of work.

Quality contributors defend against freeloaders as we have addressed previously, so a budget from the Foundation doesn’t address this. They are in the best position and Coordonape is designed to ensure resources are going to where value is.

If folks are worried about contributors getting more than their USD value in the real world, is there a way to cap the amount a single contributor can make? We could set a generous cap to attract quality but enable some restrictions.

The Pocket DAO strat should land on the side of being competitive for top talent and heavily incentivizing those who want to take a risk, but these changes do not lend to that ability.

1 Like