Coop Contributor Compensation Conversation

Say that title 5 times fast!! :stuck_out_tongue_winking_eye:

So the bulk of this is from a proposal i was going to get retroactive rewards for my work but after shopping it to the Business Development team and them pointing me to the Org call yesterday I realized that this is a coop wide issue and not an edge case for me.

Basically the Coop doesn’t pay contributors well enough and there is not a defined, results-oriented process for how much a contributor should be getting and for what work. One thing I really want to emphasize in this convo which has come up elsewhere is has little INDEX the majority of most active contributors own and that we can use this as a way to expedite autonomy and governance blockers.

(twitter was really throwing the perfect tweets at me today for this post. its like they are reading my keyboard)

So basically this post changed from “pay me for this” to “pay all of us more, here’s an example why” but i haven’t modified the actual body at all.

CREAM BD Rewards for Kiba

All data as of 20.07.2021

Since just 2 weeks after the Index Coop launched I have lead our integration with the CREAM.finance lending platform. In the 10 months since then I have only been paid a total of $15,000 despite DPI on CREAM now accounting for 7% of the entire Coop’s revenue. That includes work not related to CREAM like IIP-29 for DPI Intrinsic Productivity, writing the first coop newsletter, and building the product page on the index coop website.

This is a proposal to fairly compensate me for all of the value I have provided for Index Coop and DPI with my work on CREAM.

(the picture in the tweet adds mad context. plz click. idk why it won’t show in forum :sweat:)

A short history of DPI x CREAM

As you can see I have been very proactive on both the Coop and CREAM side to push this collaboration further. I even went so far as to modify the CREAM governance framework by creating the Listing Committee to make it easier for us to list Coop assets. This has led to DPI being one of the most supplied assets on CREAM and CREAM being the top DeFi protocol for DPI after Uniswap.

As of July, CREAM holds 20% of DPI. DPI is 34% of Coop revenue so CREAM accounts for 7% of the entire Coop’s revenue and 26% of all unincentivized TVL for DPI!

With $2k-4k in revenue per day from DPI this means CREAM generates $400-$800 in profit a day for the coop.

This doesn’t even include the DPI/ETH liquidity pool tokens that I am working on getting listed on CREAM. Once that is live these numbers could easily double. However if I am not being compensated for my work with DPI x CREAM then there is no reason for me to push for DPI/ETH LPs to be added to CREAM. I also want to get DPI listed on our L2 markets which will also help us drive liquidity there but there is not enough initial liquidity yet for us to be able to list DPI safely (been talking to BD about this)

Data Sources (20.07.2021):

DPI supply - https://duneanalytics.com/jdcook/DPI

Index Coop Revenue - https://duneanalytics.com/jdcook/Index-Coop-Revenue

CREAM DPI - https://app.cream.finance/markets/v1/0x2A537Fa9FFaea8C1A41D3C2B68a9cb791529366D

Iron Bank DPI - https://app.cream.finance/markets/ironbank/0x7736Ffb07104c0C400Bb0CC9A7C228452A732992

Other Coop Reward Packages

Liquidity mining rewards

Used to incentivize DPI supply and liquidity. CREAM achieves both of these by providing a productive usecase for DPI and supplying volume to LPs from liquidations. Even if we use the lowest LM rewards from latest IIP (12,785 INDEX / 69,204 DPI / month) that would mean my compensation for July alone would be 15,000 INDEX. While a direct comparison for raw DPI doesn’t work, this comparison can definitely be used for DPI/ETH LPs once they are added to CREAM.

MVI community methodologists

They generate just 2% of revenue and receive 15,000 INDEX over 2 years + $5,000 per month. I have been working on CREAM for almost an entire year and generate 3.5x more revenue than the entire MVI team yet have only received 2,200 INDEX and no USD rewards. So despite having 3.5x the results I have received 90% less compensation than these fulltime contributors. (!!!)

Proposal

For 9 months of work on CREAM and generating a significant amount of profit for the Coop I am requesting 15,000 INDEX as compensation.

Please keep in mind that a lot of this work was done in the first 6 months of coop when INDEX price was <$10-20 so please do not use current price for full evaluation. This is nearly a full year worth of compensation and also uses other Coop compensation packages as reference.

I think verto mentioned a revenue stream share instead of outright payment which i am fine with going forward, if coop ever decides on that structure, but that does not correct for past unpaid work which is what my proposal is about.

Feel free to discuss my request for compensation and the broader DAO efforts like shifting funding to working groups.


Appendix

DPI Supply Breakdown

Kiba Index Contributor Rewards

4 Likes

Hey Kiba, the most fundamental difficulty with this is that we have no way to attribute TVL in Cream to being a reason for people purchasing DPI. Cream doesn’t generate any profit for the Coop, the DPI being held there does, and it would just go elsewhere if that option wasn’t available.

The highest yield for DPI is still the Uni LP pool at 10% in INDEX + trading fees, and with that only accounting for 14% of supply, it’s hard to see the 0.6% supply rate at Cream being a reason for DPI to be purchased. The utilisation ratio is also just 17.3%.

You knew the rough comp levels when carrying out the work and didn’t raise any disputes at the time. If this post is just a way to start a convo around a different method of compensating this type of activity, then it does the job. I’m sure the BD/IB teams will also be interested in having the same discussion. In terms of comp for this activity specifically, the reward to Michael Petch for work with Fireblocks seems like a more appropriate place to start.

6 Likes

Would need to dig into everything more, but feels like a big assumption to say DPI unit supply has been driven by Cream and it’s 0.36% supply APY. It feels more like a place people put their DPI because, why not? We don’t have any productive options outside of Cream atm, but that will change. Rari, potentially Aave soon. How should we view compensation if new lending markets take the majority of that supply from Cream? Like, this is an opportune time to ask for more rewards for that, but in 3 months - 6 months the case could be completely different.

I think DFC said it best about the reward you are seeking.

3 Likes

One of the bigger painpoints we heard from whales about DPI was that they couldn’t leverage it so would prefer to hold individual tokens instead. CREAM is providing valuable utility to DPI holders that isn’t provided anywhere else, leverage. CREAM doesn’t mint new DPI but they provide a valuable usecase for DPI holders. So no we can’t look at how many units of DPI CREAM mints but we can look at how many units of DPI that CREAM supports. CREAM does drive profit, in fact CREAM is so far the most profitable integration for the coop. We have spent $0 on incentives for the platform, barely any marketing or comms, etc. while also holding more DPI than uni, sushi, or any other defi platform.

There is nowhere else you can leverage your DPI.

The highest yield for DPI is at least on sushi where you get ~12% APY in onsen + 5-10% APY on the pool fees. You can earn that 25% in a day if you are a good trader and deposit your DPI on CREAM and leverage into more DPI. So DPI holders would rather leverage on CREAM than earn a calm 20% APY in a good farm.

The purpose of CREAM for long tail assets is to leverage them, not earn interest

So you are looking at the wrong data @DarkForestCapital @jdcook . Utlization rate is about lending you need to look at % of tokens being used as collateral (collateralized / minted). 91% of all DPI on CREAM are being used as collateral for loans on the platform.

The 20% of DPI supply in CREAM is locked in the protocol until they pay back millions of dollars of loans

If anything you are arguing in my favor - I’m the only one at the coop thats been able to accomplish this type of integration. And again, this is about PAST WORK. What happens in the future happens, but the results at present are very clear. For my next round of compensation for CREAM the data will change if other competitors join. We’ve been saying “AAVE sune” since November 2020.

So i should have asked for $500k upfront to get DPI listed on CREAM to compensate for the full lifetime value of the deal to the Coop all before hand? Results and data based compensation is the preferred method of any high performing individual, everyone i’ve talked to on BD would prefer something like this and have already changed how they reward contributors before/after deals are made because it is not effective to pay 100% upfront based on promises.

He got $20k just for listing and I barely got $2k. Thats before you factor in how big of an impact CREAM has on DPI and Coop. Also how much DPI is managed through the fireblocks platform? Useless comparison if you can’t actually show profitability of each integration.

Well CREAM is likely going to add DPI/ETH LPs to the platform and adding DPI to polygon once we have launched our liquidity there so I imagine my ask will be a lot bigger in a couple months.

1 Like

I wholeheartedly agree with what @Kiba is saying here. We need to have better incentive alignment for long-term value creation, especially in BD/Institutional Business/Integrations groups, for results that benefit Index Coop.

@DarkForestCapital @jdcook

One mental model I have for thinking about what the “right price” is for this is asking the following questions:

  • How much would we reward a contributor for securing a Tier 1 CEX listing (i.e. Coinbase, Binance, etc.)?
  • How much would we reward a contributor securing an Aave integration for DPI?

15,000 INDEX (~$300k) might not be the right number, but if the answer is only 200 INDEX ($4k) we’re simply not going to be able to retain the A players we have on the BD / Institutional Business teams at Index Coop.

From my personal experience working at a FinTech company that did enterprise sales, I’ve seen that it can take months or years to get enterprise/institutional business deals/partnerships like what we just saw with BitGo. I really don’t feel that like that has been recognized for how important it is to the Index Coop’s success.

It takes continued engagement from top tier professionals to secure these top tier listings and integrations with key institutions.

We are dramatically undervaluing these kinds of contributions at the Index Coop and we need to fix this. Going through the exercise of determining fair compensation for @Kiba would be one way to build the right framework for BD & Institutional Business Working Groups while also doing the “right thing” for @Kiba.

3 Likes