PEP-16: Universal Contributor Income

We prefer “Poktopi”. :rofl:

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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.

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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.

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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.


  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.

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One more thought: Companies looking for top have to pay more to compete in the free-market, and the Pocket DAO has more than enough budget to be competitive with those taking a risk.

Some notable risks that must be accounted for when working for a DAO:

  1. Paid in a volatile currency that change dramatically week to week. The amount you walk home with is always different month to month (especially with Coordinate where it’s design to have varying pay month to month depend on your standing with your peers)
  2. Work is mostly on public display in some fashion. That is not the case with most other jobs where you work for company. This means you have to stake your public image on your job… which is on the internet forever.
  3. Regulatory concerns since DAOs are not recognized companies and the crypto scene changes rapidly.
  4. You do not have employee protection contracts or guarantees. You honestly never know what’s going to happen month to month.
  5. There is a significant administrative overhead with orchestrating and managing your own benefits and accounting.
  6. By nature, DAOs are less organized lending to more chaotic/drama infused work environment.

That is a start. I’ve worked for a DAO and have had to deal with these risks in real life. I’m sure there are more, but this is a Sunday :smile:

Because of these differences between working for a DAO and working for a traditional company, all quality DAO work should come with a competitive premium considering these inherent risks.

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This really addresses some of the things I was pointing out as concerns in my earlier comments; with the current DAO proposal system, a 100K pokt budget is possible given DAO approval, but that’s definitely not the case with Coordinape, or at least, not in some obvious fashion. Increasing the pokt rewards in each epoch still doesn’t account for the vast disparity in the possible value of contributions.

One of the responses earlier was that DAO proposals remain an option, and if the UCI model is intended primarily for hobbyists, and the expectation is that full time projects will still make DAO proposals and seek approval, that seems like an acceptable way to delineate between the two.

However, if Coordinape becomes the default mechanism and all contributors are generally expected to use that system, it would run into the limits @shane describes (and yes, I intend to make a proposal myself once I make The Poktopus a full time role after the first of the year). We have a number of high caliber professionals in the community now working on larger projects with the ethos of “build it before you propose it”, so we need to maintain an easy route for them to seek and receive funding.

Providing clarification on the limits of Coordinape, and the continuation of the proposal model still satisfies my concerns here.

Stabilizing value will happen by the contributors. I’m personally not worried about that. What I’m worried about is having such a tiny pool of resources.

We quickly went from the idea of “let’s put good resources towards this and really encourage growth” to something that is targeted towards hobbyists and is not ideal for professionals.

The perfect example: A rising tide lifts all boats… unless the water is to shallow already for most boats… and especially shallow for large quality boats :wink: If we set the tide where only only small boats can participate, then we will have the contributors only be part-time hobbyists.

I just want us to be clear with who we are targeting. If we want top quality contributors we need to have more resources to start with. Quality professionals are going to be attracted to salaries better than the competition.

How have other Coordinape projects started? I suspect everyone has dealt with initial funding. I’d be curious what their experiences were.


At Pooltogether we’ve just started using KPI options for coordinape payments as well as to pay out grant recipients if they choose. We chose to do ours based on TVL for the protocol and do a 6 month time frame. It’s a good route to reward long term contributors and I don’t find it to be overly complicated. This is our first batch and we hope to make adjustments as we go and may be able to use it in other areas. We had an infographic made to show community members how ours work. Everybody seems very happy with them so far and it actually seems to be the perfect use case for them.

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The purpose of our UCI is to provide our contributors with a stable income. Making them wait 6 months to redeem their rewards does the opposite.

We also already have revenue tied to our key KPI; by the design of Pocket’s protocol, block rewards are minted proportional to the number of relays coming through the network, and if our UCI is a % of this, this means monthly payments are going to be larger the more relays are coming through.

Clarifying question: does the token that is redeemed from the KPI Option need to be an ERC-20? How does that redemption work?

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That is just the time frame we chose for our first batch and I’m thinking we may reduce to 3 months in the next batch. The time period could be set to whatever you choose but I can see how it would not be ideal for those using it as income and looking to sell the tokens right away. I do think it aligns incentives though for those who are committed to the long term growth of the protocol.

The KPI options would need to be ERC-20. The Pooltogether options are on Polygon to avoid the gas. For redemption you can go to the UI after the redemption date and redeem your tokens to unlock underlying collateral tokens. There would be a balance returned to treasury assuming the options did not reach the max payout.

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To clarify now that I know the preferred terminology, would the underlying collateral tokens need to be ERC-20?

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Yes, collateral token would have to be ERC-20 as well.

That breaks our ability to keep it POKT. I suppose this is something that could be done with wPOKT.

Yes, wPOKT can be used as collateral.

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While you can’t use the KPI for the fixed stable income but for incentives, it might be an option worth considering. It can help to align incentives based on the long or short term goals.

How is a contributor defined? How does one become a contributor?

This would be defined according to PIP-8: Use Coordinape for Contributor & Voter Onboarding

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