Contributor Reward Framework

Finance Operational Funding & Payroll
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What is the situation?

In response to community feedback from early March, The treasury committee and Index Coop more generally are trying to scale working groups and by extension, treasury rewards, simultaneously. The current method for distributing rewards is leftover from launch and can be improved. It was intended that as part of rolling out working groups, the framework for rewarding contributions will remain the same but can be applied by working group leads to more accurately reward contributions based on impact, effort and alignment with our goals.

What is the problem you are trying to solve?

It was recently highlighted in this post that communication around the proposed reward distribution via working groups needed further clarification. By clarifying the intention here we aim to have an open discussion and lay out how the process is intended to work.

The proposed solution

The current method for distributing rewards is laborious but seems to work well from the perspective of both contributors and the Index Coop. For context, the Treasury Committee & engineering resources from Set work on monthly rewards for approximately 1 week every month. The Coop is able to direct and reward useful work, and contributors are able to pursue interesting threads and be rewarded for having an impact. To date there have only been two issues raised using the dispute process, both of which were for having missed a contributor (easy to do when 30-40 people participate each month!). This seems to support the hypothesis that the Treasury Rewards framework itself works well enough, but there can be improvements to make sure we don’t miss vital contributions, that is where working group leads come in.

By empowering the WG leads to apply the reward framework as laid out in IIP-4, we can ensure the right people are being rewarded and at levels appropriate to their contribution. The treasury committee will ensure alignment and harmonization by checking in with each working group to assess the fairness of rewards between contributors, before then aligning reward levels between working groups. It is assumed that the level of oversight can reduce over time as levels of trust and familiarity with the process grow.

The second and equally important step will be to ensure rewards are reported transparently. For this point it seems to make sense to include rewards in the monthly distribution sheet produced by the treasury committee as the already established and agreed upon method. Doing it this way also means payment can be calculated using the 20-day rolling average which ensures consistency for all contributors.

Next Steps

  • Raise this as an item for discussion at the Org call 24th March - Done
  • Open the convo here on the forum, is the solution sufficient, do we need to consider anything else?
  • Treasury committee agree to align with wg leads and maintain oversight on reward distribution, harmonising between each area prior to monthly distribution
  • Rewards continue to be reported transparently via the monthly spreadsheet
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I see that the method is laborious but do appreciate that it is effective.

Just by way of broad discussion and ideas - this post from Andre Cronje about Coordinape for DAO contribution payments is novel - Decentralized payroll management for DAOs | by Andre Cronje | yearn.finance | Mar, 2021 | Medium

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It’s a very nice system. If you have questions about it do not hesitate.

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Hey IndexCoop’s treasury committee,

Curious to know how you make payouts to your DAO contributors?

And could I know more about ‘smart treasury’?

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Hey,

We pay based on impact, effort and quality of the contributions while making sure it’s aligned with our goals. Contributors submit their work monthly and payments are made on the same schedule, see here for last months distribution.

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I would love to see something like this on a partial and temp basis to see if it works well; I wonder if it’s been working for Yearn. I generally like the idea of contributors voting with with equity in proportion to their own view of what other contributors are bringing to them personally and The Coop overall. The way I’d envision it is each ‘level’ (Bronze, Silver . . . ) having some set allocation.

That said, the current system is good and works, so not looking to go down the path of, “if it’s not broke, make it complicated”, but I do believe we will have a scaling challenge in this regard, so maybe a test-bed with low values to start would be a good way to flesh out the system.

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