PEP-39: Economics R&D Funding

I have added the following disclaimer to the end of the Scope of Work section:

Disclaimer: This agreement should not be construed as endorsement or approval by the DAO of any analysis or research idea generated under the terms of this agreement. Any analysis, idea, suggestion etc. will be subjected to the same rigor of scrutiny that would attend contributions made by any other party.

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This proposal is now up for voting at @msa6867’s request Snapshot

Hey @msa6867, for starters, thank you for all the work you’ve done for the community. I am mostly in support of this proposal. However, I’m not onboard with an "evergreen’’ spend that does not include measurable outcomes or clear performance review guidelines. So, I’d be in favor of this proposal with the addition of something like a quarterly or semi-annual renewal that required a re-vote to keep the role active .

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Very clear and transparent! Having such talent help the project can only be good.

Thanks Steve. I appreciate the feedback. Since voting has already started on the current version, we will proceed forward as is. If we need to revisit based on significant consolidation of sentiment around the addition you suggest, we will do so. I do believe, however, that there are sufficient checks and balances defined in the proposal to ensure that the DAO is always receiving value. More practically speaking, I will always have some key people like jack and Ben looking over my shoulders, and I have no doubt that a proposal by either of them to cancel the agreement with cause would gain swift consensus. The other consideration to balance your suggestion is that it is not always conducive for the production of the best quality work to place a person in the position of feeling like they are constantly on probation. There is a reason such continual 3-month re-votes don’t show up in too many places in life. While I totally understand that you may not be able to support this proposal as-is, I would ask if you might reconsider.

Thanks for the response @msa6867. I agree it’s too late to make a change now and I also agree that being under a constant probation period is not a good idea for a long-term role. That said, I’m still not sure how I feel about this proposal. Not because I don’t value your contribution but more because I’m not sure this is how full-time DAO roles should be decided. Neither @JackALaing, nor @b3n, nor any other full-time role has been decided like this. Maybe this is a brilliant new way to hire. But, it seems that effectively, @JackALaing and/or @b3n will be ultimately taking responsibility for gauging your performance (without the ability to make a change themself, if needed) - you will effectively be working for them but they could not remove you without a vote. It seems to me that they should be making this hiring decision and just proposing a budget to the DAO.

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Hi Steve, its definitely new territory so I get the hesitation. I only mention those two bc facilitating DAO contributions is within their PNI SOWs. There are several in the community who will also be closely involved who have zero ties to PNI. In addition, there are many in the community who do and will continue to act to monitor that the various spends are providing value.

For example, think of how much discussion occurred over the last 6 months about what ferrum was doing with the money we gave them and where are the goods they promised. The only problem with ferrum is that all funds were disbursed upfront. Imagine instead ferrum disbursement had been monthly. Their underperformance/lack of communication would not have slipped quietly into the background… There would have definitely been proposals on the table to cancel the agreement. I do trust this community to be able and willing to raise the axe to an ongoing funding project if and when it ceases to provide value.

In terms of this proposal, I talked w Jack and he confirmed that the mechanism of the PIP/PEP/PUP proposal process is such that mods are not allowed once voting has started.

Hey Mark, again I want to reiterate that my concerns with this proposal have nothing to do with you personally. My concerns are that it’s a big commitment, and that it sets a new precedent for hiring that I’m not personally a fan of.

I can think of a number of people in the community who I’d love to see getting a monthly salary from the DAO for their contributions. For example, @Jinx, @poktblade, @addison, @pierre, @shane, @BenVan, @Pierrick, @Poktdachi, @beezy, and @Qspider to name a few. What if they all decided to submit a similar proposal based on their qualifications? If I vote in favor of this proposal, I’d have to vote in favor of a proposal from any of them or anyone else that has demonstrated a similar commitment to the project - A LOT of people. This just isn’t practical nor the right way to onboard full-time roles in my opinion. From my perspective, hiring decisions like this should be decided by the current leadership, and the DAO should just approve the budget and/or need for the role.

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I tend to agree with @steve. Although I like very much what Mark is doing, but such proposal is, in my opinion, both expensive (especially at current POKT price) and unfair to everyone else that is quite committed to Pocket with highly valuable contributions. Furthermore, problem is that there are no guarantees that the research will result with the correct decision. I would personally rather like to see public community discussions around inflation rate like we had with PIP-22. Solutions are presented by community members, feedback is collected, then voting comes in. Step by step, improvement by improvement, POKT will end up having a solid coin economics which will be a result of everyone’s voice in the DAO. I don’t think there should be a full-time role for this role, I would rather use the funds for POKT marketing, business development, core development, while letting DAO members discuss pros and cons of certain changes of coin economics.

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I understand both of these points by @steve and @TheDoc, but let’s keep in mind who we are talking about here and how much @msa6867 brings to the table. How many hours he has put in? I don’t think someone of his caliber needs to have performance reviews. And I think submissions to the dao from individuals are a case by case basis.

Of the people mentioned above I think only @poktblade fits in the same category as @msa6867. Of course the other individuals are great and the community wouldn’t be the same without them, but more than a few have their own node running operations and therefore incentivized by means outside of DAO funding.

DAO funds need to start getting into circulation. People are motivated when they get paid out. If he works this hard for free, how much will he do when he is on a regular stipend?

To the point of it being expensive. The DAO gets 10% of pokt minted to what? To sit there and continue accumulating? POKT price is irrelevant imo when discussing these proposals. Had we been getting this pokt into circulation at 30 cents or 70 cents we might not be in this situation of a 95% drop in price. We should be moving towards getting that in circulation not the other way around.

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Hey @msa6867,

Sorry for the late reply here. I understand this proposal is up to vote now, but I wanted to post a reply.

Thanks for submitting this proposal. I’ve been in support of the concept of delegating complex DAO activities to qualified folks.

For PIP-22 I know that myself and others asked for economic impact models prior to it’s voting. I was disappointed that no one created a workable model that was approachable to the community. Instead the economic discussion was very theoretical and became too complex for most to follow. This past Node Runner’s Community call is a good example of how disappointed and confused folks are about PIP-22 and it’s actual impact, especially if different parameters are changed.

I myself did a lot of economic modeling at that time which pointed out network crushing issues with Good Vibes and even started proposing my own solutions with comprehensive models. PIP-22 garnered the most attention, so work on other solutions stopped. I would want an economic advisor to the DAO that would dedicated to mapping out the economic impact of all solutions, not just select solutions that get the most attention. We are still unsure what the long term impact of major parameter changes to PIP-22 would be yet we invested heavily into it’s development. This lack of understand is why I did not vote for PIP-22 in the first place.

I would want someone I can trust to do that heavy lifting eco work in an objective manner and someone who acts on behalf of all DAO proposals equally and not just proposals that are popular or from the team. I’d like to hear how you plan to be objective when multiple proposals are being submitted, because that is what we seriously lacked this summer.

I’d also like to hear how you plan to make economic proposals approachable. You are a very technically minded guy, which is a great strength, but the DAO also needs good communicators that can make things comprehensible so voters can make informed decisions. PIP-22 is a good example of a very technical proposal which economics were never broken down in an approachable way, leaving voters now confused what it’s purpose was (since most of the network has now shifted to use of lite clients). We need approachability (not more complexity), so I’d like to hear your plan for that.

Much Thanks :slight_smile:

Thanks for the comment @ethen. Again, to be clear, my objection is not with @msa6867 or what he can contribute. This proposal represents a commitmet for a full-time role. I don’t belive this is the right way to onboad a full-time employee. My opinion is that choosing full-time employess is the responsibility of the current leadership. If the DAO starts voting in full-time employees and doesn’t trust the current leadership to hire the right people that could become a mess. If this was a reimbursment proposal like the one @Andy-Liquify proposed in PEP-40 I’d be all for it. So, again, my viewpoint has nothing to do with the value of @msa6867 his contributions.

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I am aligned with @steve Steve on this one.

@msa6867 is a really strong candidate and has a role within this community that should be rewarded. I would love to see MSA hired as a full-time executive for POKT and remunerated accordingly with a strong compensation package and vesting schedule. He would add value to the c-suite and could help in ways that would bring real value to the entire ecosystem. Excellent experience, incredible educational background, understanding of the nuances of this ecosystem, and willingness to be full-time.

I am going to vote no for a few reasons:

  1. I’d like to see MSA involved as a c-suite member who would add value, expertise, and complementary skill set to the executive team.

  2. I don’t want the DAO to become a tool that the executive team can shield itself from. I could easily see a poor decision being put on MSA by the community in an unfair and uninformed way. I am not as active as many of you, and I would feel in a very awkward position if a future DAO vote was to terminate this contract. We are talking about someone’s livelihood, and I wouldn’t want to see this play out in an open and visceral way. Could be harmful to the long-term success of this DAO.

  3. The DAO, in which most of us are voters, doesn’t have a fiduciary responsibility to manage teams, let alone determine compensation packages, and then later, must determine future employment. This should be left to the c-suite.

  4. I would like to see the DAO more focused on funding building and I am very much aligned with Ethen that supporting builders is paramount to the success of the ecosystem, irrespective of their full-time job, node runner, or running a PE Firm, building is building. There should be no delineation between the two.

  5. I’ll use my dear friend @ethen example. A list of community members was provided by Steve as an example. All of us likely look at that list and have a difference of opinion. Some are working behind the scenes on a host of initiatives. Many of them don’t want to be known or want to be in the public domain, getting them funding would be problematic and thus, I just think it should be avoided entirely. MSA is very vocal on these chats, and others I could argue are providing more consultative value behind the scenes. Getting them rewarded for participating in the community feels like it would be prone to error.

  6. If MSA has provided long-term value to the community, then I think we should apply a formula of time spent, risk, innovation, and long-term gain and pay him a lump sum payment for work done, and I am a huge fan of spending for value (to @ethen 's point). Make sure his time is rewarded and then hire him. For example, if he is asking for 13k, and spends three months, let’s pay him 100k. I am not shy about rewarding those that take the risk, in fact, we should encourage it. While some may say that type of reward may or will upset a full-time employee, the reality is, that there is risk associated with community involvement. That should be rewarded far greater than a guaranteed monthly paycheck.

What a great story to the POKT ecosystem. A community member with an MIT degree, success metrics, and experience goes from a telegram chat evangelist to a Sr. Executive, maybe even a CFO. These are great stories that will circulate the ecosystem and encourage participation at a level POKT needs.

I think I would be correct in saying that Michael, Jack, Luis, and the rest of the core team would welcome an intellectually capable person who has demonstrated a profound understanding of POKT.

MSA, I do not want this post to be a debate, these are simply my current best ideas and my thoughts. I wish you all the best and tremendous success and, in my opinion, I think the POKT team could use someone with your skillset. Thank you for all of your contributions – I know how hard it is to navigate these waters and how difficult it is to put yourself in the limelight. I will also add, should this proposal not pass, I would be the first one to support a high reward for your efforts thus far and would suggest a high multiplier of your time value.

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Thank you @eagle_wins, @ethen , @steve et all for your kind words. Lets see how this shakes out. I went into this with eyes wide open knowing it breaks the mold of how the DAO is used to managing its treasury. I personally think breaks from tradition are useful when watranted, but I torally understand and respect the other point of view

I think it is a misunderstanding to say that any thing that looks or smells like “fulltime” belongs to the domain of PNI rather than the DAO. These are two separate entities with two separate treasuries who work together to build Pocket’s future.

Assuming the community is more or less agreed that my contribution is valuable and it comes down more to a debate of whether it should be funded by PNI or by the DAO, the main question I would leave to DAO voters is, which side of the PNI-DAO firewall do you prefer me to contribute from. On the PNI side i am subjected to all the same “we’ll see what information we can release to the DAO” that attends other PNI-generated IP. Contributing on the DAO side that never becomes an issue.

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Hey @shane , i need to give your questions some careful thought. I will circle back to them later tonight… make that tomorrow (Friday)

After long and thoughtful deliberation, and discussion with members of the community, I have voted against this proposal.

I echo @steve and @shane 's sentiments on several fronts:

  1. The open ended nature of the scope of this proposal sets a bad precedent around how the DAO manages contracted talent, and there isn’t currently an established mechanism for DAO delegates to manage this in a meaningful way. Should some of us who follow this work closely decide that it isn’t meeting the expectation, the need to file a proposal to terminate services (“default to on”) makes for a cumbersome and lengthy process to undo it. That by itself gives me pause.

  2. I believe we are missing an appropriate formal framework for vetting community analysis which should be resolved before any proposal like this can move forward.

  3. Due to that, there were some significant concerns about the analysis and answers provided around PIP-22 which were not well accounted for or perhaps answered accurately (including points by @TracieCMyers and @RawthiL / PoktScan team) leading to confusion on the part of myself and others about how exactly the stake weighting proposal would impact node reward performance. Given that this is exactly the type of work that is being proposed, I strongly feel that without a formal framework for analysis, this kind of shortcoming may be ongoing.

I very much support compensating you for the time you’ve put in already, and at an additional premium given performing the work at risk. But I think the correct path for the DAO moving forward is to form small tight committees around areas of expertise which allow for analysis to be well rounded and agnostic to the outcome. I would also support you being the first member of an economics committee, along with Tracie, Michael Kadow, Adam Liposky, and Shane (sorry for volunteering all of you). Committee work time would itself be compensated.

Until then, I cannot support this proposal.

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When I started contributing in June, I had no idea who was who, who was “from the team,” who was popular or anything. The first time I saw a post by Michael O’ Rourke in the Telegram chat I just assumed he was just a random community member, lol. So I don’t think there is any bias in that regard.

I give attention to all proposals equally at the start. (I do this, as well, for all community-offered pre-proposal ideas and suggestions, but let me focus on proposals for now). From there, I must choose how to most efficiently narrow my focus for greatest impact and benefit to the project since there are oly so many hours is a day. The initial analysis of a proposal results in the ability to triage the proposal according to 3 criteria.

  • How large an economic impact hangs in the balance of the proposal passing or not and/or having the proposal language modified or not? (If little-to-no economic impact hangs in the balance, the proposal may not warrant further attention from me, whereas a large potential impact is cause to invest the necessary time to conduct a deeper analysis and/or education of the community as to implications)
  • How complex or nuanced is the analysis that is required? (If the analysis is simple enough that others already have or are likely to provide sufficient analysis, there is no need for me to reinvent the wheel. Or if a problem is hopelessly intractable, it doesn’t make sense to waste time chasing down a dead-end rabbit trail. My time is most efficiently spent in the zone in between)
  • How likely is it that my voice will make a difference? (It is hard to justify spending an inordinate amount of time and energy on proposals for which it is all but a foregone conclusion that they will pass or will be voted down, unless the anticipated vote carries dire consequences.

In June I stepped into a set of proposals (PUP-14, 15, 17, PIP-22, 23) that had already undergone extensive community discussion and formulation of voting intention, which is very different from catching proposals when they first drop, so the last criterion above played a larger role than exists for new proposals. Here is how I triaged them:

  • PUP14 – low-to-moderate impact; low-to-moderate analysis complexity; low chance of passing prior to v1. Result after initial analysis: keep on back burner and periodically remind the community that raising number of validators is still on the table and must be factored into future economic analyses.
  • PUP15 – high (mostly negative impact, medium complexity, zero chance of passing (the community had already dismissed it). Result after initial analysis: no need for further attention.
  • PUP17 – high mixed positive/negative impact; medium to high complexity; unfavorable reception from voters. Result after initial analysis: keep my finger on the trigger to dive deeper; took finger off the trigger once PUP-19 dropped and offered a superior next step
  • PIP-22 – high impact, high complexity. Mixed reception from the community. Result after initial analysis: diver deeper into the analysis; help correct what I perceived to be defects in draft and later educate community re misunderstandings of its mechanism
  • PIP-23 – high impact, medium-to-high complexity; community had left it for dead after Luis insisted it would be a risky and 6+ month dev. Result after initial analysis: pushed back against Luis’s assessment in many private conversations and when it seemed that sentiment would not budge, focused on PIP-22 to get at least one high-impact infra-cost-savings proposal across the finish line. I have continued working PIP23 in the background since then. I have learned much more about the Pocket architecture and feel ready to challenge cordev assessment regarding implementation feasibility and am getting ready to make a new push to get a version of stake-weighted selection put to a vote.

After these “pre-existing” proposals, I have been able to attend to all proposals from when they first drop, which is a much easier place to contribute that stepping into the middle of highly-vetted proposals. Here are some actions since then:

  • PUP-19: medium positive impact; medium complexity; extremely high voter reception. Result after initial analysis: gave my assessments to the community that the proposal would have moderate positive impact, no foreseen downside and is complementary to PIP-22/23 efforts. No need for further analysis or education beyond that unless community started to turn against it. Since then, periodically remind the community that 5% allocation is just a stepping stone and that proposer allocation needs to be revisited in the future.
  • PUP-20: large mixed bag impact; low-to medium complexity; undefined community support. Result after initial analysis: recommend against the proposal on the basis of interplay between raising MinStake and 100% slash of falling below MinStake. Kept issue on back burner since 100% slash is no longer a concern and have been socializing revisiting the proposal in various background conversations. Will move it to front burner for deeper analysis if TransferStake passes as expected.

Skipping the rest of the summer proposals, let’s look at how this triage principle applies to the ferrum proposal (PIP25) – to which I was the first to post a comment. Initial analysis: high risk, high mixed-bag economic impact, high complexity, very little community support: Result after initial analysis: keep finger on the trigger to divert attention from other areas of concentration (LC, stake-weighted sessions, V1 reward structure, etc.) to conduct a thorough analysis if and when there develops any semblance of life to indicate the community has an appetite to give this proposal serious consideration. If initial analysis had indicated there was huge positive impact to the proposal then I would preemptively dive deeper and try to champion support for the proposal. But since it seems to be a mixed bag impact and leaning negative, there is little point to spend preemptive energy to the detriment of other areas of research until knowing there is at least a modicum of interest from the community.

I have learned many lessons over the summer, including from the PIP-22 rollout, as to what messaging type and depth is approachable to different segments of the community. I will apply those lessons learned going forward. This issue is not so much ability to communicate at various levels, but initial incorrect assumptions regarding what messaging was working and what was not.

Four important pivots I will make going forward are: (1) I will vet important communications with key representatives from different community segments prior to posting to make sure the message is likely to be received within that community. (2) Where in depth communication is needed to satisfy the needs of certain segments of the community, I will make sure there is an accompanying tl;dr that can be used by everyone else. Since I am not a particularly adept graphics artist, I will partner with others who can help create graphics as needed for those tl;drs. (3) I will use AMAs, private phone calls and other live-interaction formats to help me gain the necessary real-time feedback I need to see if a message is being received as intended so as to avoid only learning after a month’s time that a message was not understood or received. (4) I will utilize multiple communication channels to disseminate messaging rather than relying solely on the “den”. For example I had posted a tl;dr on what to expect with PIP-22 in the den and I hadn’t realized that the eyeballs who needed to see it may not have seen it in that location.

In addition to these steps I am open to other feedback as well.

Interesting idea. Can you elaborate, offer a few potential examples?

Do you mean a formal framework to perform analysis and to “vet” analysis (that someone else from the community might do)? And what connection do you envision this “framework” having with the DAO?

I envision three key committees: economics, technology, governance, each comprised of five vetted experts from the community, and paired with a dedicated PNI counterpart to get internal information as needed to inform proposals. Committee review would have a formalized output structure which includes relevant modeling of impact, and clear “explainer” docs with lay explanations backed by the models. Any proposal which would adjust network parameters or introduce consensus breaking changes would be required to go through committee for a “support” or “oppose” position with a clear explanation why.

Lots of details to work out, but that’s my general premise.

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Lots of good thought here. Work toward defining and seating committees must continue independent of PEP39. I had suggested to Jack also a “Funding oversight” committee… I think that is its own category rather than subsume under governance… there is a whole lot of other governance work that needs to get accomplished separate from funding oversight.

There are other key metrics besides economics, inlcuding QoS and Security… I don’t know yet if that gets lumped in with economics or bears a separate group? Last, I think devrel committee is a must.

“Paired with a dedicated PNI counterpart to get internal information as needed to inform proposals” is a great idea!!

I would love to work with both PNI and the community to see the DAO grow as it scales by defining these kinds of official DAO committees. Obviously this is separate from and beyond the scope of my proposal (I was careful in the distinction between this kind of official committee formation which will take some time for the DAO to figure out how properly to constitute) and the more informal working group that is in the proposed scope. If PE-39 passes and the DO wishes to vote to add me as a member of such an official council along with other voted members, it is super easy enough to create wording at that time to exclude any “extra” compensation to myself for committee work that other committee members may receive since I am already receiving DAO compensation for the broader work and value I bring to the community (of which such official committee work may be only a small portion if and when it eventually gets defined).

In the meantime, based on my proven track record of consistent involvement, consistent hihg-value contribution etc. coupled with the detailed answers I provided above (see response to @shane ) on how bias is avoided and how proper levels of communication in the proper channels will be achieved, I see very little risk and very much to gain for the community to pass PEP-39 even though every last detail of check and balances and other similar concerns and process of morphing in the future to official DAO committees, etc. haven’t been ironed out .