IIP-36 Full-Time Contributor Retention 🦉

iip: 36
title: Full Time Contributor Retention
status: Proposed
author: Greg (@gregdocter)
created: 2021-03-19

Simple Summary

This post introduces a trial framework to compensate and retain an inaugural class of 4 Index Coop full-time contributors.

If successful, this will provide the groundwork to launch future full-time contributor programs. The immediate next step after implementation will be to create a clear framework for how another class forms.

Intro

Full-time contributor compensation has been a Coop need for months. This post proposes an experimental, specific first step.

If the framework-below is accepted by the community, the Coop will predictably compensate 4 full-time contributors. In exchange, the Coop gets their full-time focus on building the Index Coop to the benefit of all stakeholders.

This minimum-viable framework is optimizing for speed and laying strong foundations so we can quickly learn and iterate (10x From Here).

It was developed in response to community needs expressed on a variety of public forums, after researching how other top crypto communities retain & compensate full-time contributors, and in conversation with Coop community members.

This post covers

  1. Core principles
  2. Implementation
  3. How we build on this framework
  4. Next Steps

Core Principles

These are the core principles that form the foundation of this proposal:

Commitment & Trust: We, the Index Coop, should be willing to increase our commitment to contributors who earn trust by delivering impactful outcomes & who embody principles we believe are important to our long-term success.

We earn our people: We believe the best people are recruited (internally & externally), not bought. Protocols that pay top-of-market will always win salary-optimizing people. We believe the best people want to learn. Winning and retaining these people means creating an environment where people are optimizing for long-term career capital. We believe that if we improve Index Coop member’s long-term career capital, we will get the best people (Carta 101 & The Alliance).

Get the right people on the bus: “When facing chaos and uncertainty, and you cannot possibly predict what’s coming around the corner, your best “strategy” is to have a busload of people who can adapt to and perform brilliantly no matter what comes next.” (Good to Great)

Fairness: Full-time contributor compensation should be fair & based on the value/impact they provide to the Coop.

Comp. variables: Salary fills needs and vesting aligns long-term incentives + provides upside.

Complementary: This is complementary to the working group structure, treasury rewards, and bounties. Each of these programs serves different purposes.

Mutually exclusive: If someone is compensated as a full-time contributor, they will not be compensated separately via separate programs (no “double-dip”).

Speed & iteration: Right now, we need to optimize for speed and get a good-enough solution out the door that enables us to iterate as we learn and grow. Getting a fully-baked compensation program created is going to take time. This is the first step.

Implementation

Motivation

The Coop needs to retain high-quality, full-time contributors who drive meaningful outcomes to the benefit of all Index Coop stakeholders.

The contributors that fit this bill have other, and often less risky, professional options.

Such contributors need predictability (salary) and upside (token vesting).

Retrospective

Given that this is the first time we are implementing such a program, it is critical to pause, reflect & incorporate learnings.

3 months after implementation of this proposal, we will take time to reflect on how this trial framework worked.

The KPIs for each role (listed below) will be used as starting points for evaluating contributor effectiveness, but are not all-important metrics. Evaluations should also focus on growth, learnings, and continual improvement (Our Guiding Principles).

This, of course, will be done in conversation with the entire community.

What

A compensation package skewed towards aligning long-term incentives.

Salary: $5,000 per month for each contributor ($60,000/year)

  • Given the structure of the Index Coop treasury, all compensation for this trial will be in INDEX. This can change should other options become available.
  • The Treasury Committee will make these payments monthly, unless & until an acceptable alternative is determined and implemented.

$INDEX vesting: 0.15% of total supply over 2 years for each contributor (total 0.60% of INDEX supply allocated to 4 Index Coop members)

  • 6 month cliff, back-dated to begin 1 month prior to implementation of this proposal to recognize that these full-time contributors have been all-in for months.
  • With clawback - All unvested INDEX returns to the Index Coop treasury if someone leaves or the full-time contributor relationship is otherwise ended.
  • Right of first refusal - Index Coop Treasury has the right of first refusal to buy-back INDEX at the prevailing market rate at that point from team members who wish to sell. The purpose of this is to limit the amount of vested INDEX reaching the open market.

Engagement

  • Each compensated-contributor is required to post to the forum each quarter a “working group” style proposal if they are not already formally leading a Working Group.
  • The intent is for full-time contributors to make both obvious & community-informed their priorities for the upcoming quarter.

Who

We are suggesting the Index Coop bring on the following 4 full-time contributors focused on the following areas. Each of these candidates have shown motivation, commitment and leadership when it comes to meeting the Coop’s goals.

They have demonstrated they can drive meaningful outcomes.

They have demonstrated commitment to our guiding principles.

@LemonadeAlpha

  • Current focus: Growth
  • Current Mission: Grow Index Coop products
  • Core KPIs: # Holders & # Unit Supply

@BigSky7

  • Current focus: Business Development
  • Current Mission: Inject Index Coop products into the fabric of DeFi
  • Core KPIs: # Holders & # Unit Supply

@DarkForestCapital

  • Current focus: Community Methodologist - MVI & Treasury Strategy
  • Current Mission: Grow the MVI into a massive success
  • Core KPIs: # Holders & # Unit Supply

@verto0912

  • Current focus: Community Methodologist - MVI
  • Current Mission: Grow the MVI into a massive success
  • Core KPIs: # Holders & # Unit Supply

In addition to the above, Community Methodologists receive bonus compensation upon reaching product growth milestones.
More details on the community methodologist role is outlined here.

What the Coop gets

Here are just some benefits the Coop as a whole gains:

  1. Proven contributors, dedicated full-time (40+ hours/week) to the Coop’s Success
  2. Visible roles focused on driving outcomes for the Coop (North Stars & Core KPIs)
  3. Increased governance power in the hands of community members

How we build on this framework

This is a proposal to ratify an initial, experimental model and secure a base of full-time contributors for the Index Coop.

The model will continue to evolve through contributor and community feedback.

Once there has been initial approval and implementation, there will be effort and attention put into building clear paths for future classes of full-time contributors. We expect to create clear paths that are more public (i.e. Sushiswap) & utilize hiring best practices (i.e. Who, The Alliance) that set everyone up for long-term success.

As a reminder, the Treasury Rewards systems, Working Groups structure, and Bounties are current paths to remuneration for contributions.

The experimentation with new ways to attract, grow, and retain contributors is born by a recognition of the sheer volume of potential and untapped talent not only within the Coop community but also in the greater crypto ecosystem :owl:

FOR

  • Hire the 4 full-time contributors according to the parameters above

AGAINST

  • Do not hire hire the 4 full-time contributors according to the parameters above
21 Likes

I like it and think it’s long overdue. Thank you @gregdocter .

One question on the vesting: I assume that is 0.15% of the total INDEX in total (15,000 INDEX = 3,750 INDEX each ~$94,000 each @ $25).

2 Likes

Great to see we have a starting place :slight_smile:

Question - May I ask how did we come about determining the amount of rewards ?

I am curious to learn how these rewards compared to other DAOs and what approach we used to determine this level of reward is fair and equitable.

With Index being small and only a few months ago trading <$5, I feel these rewards are light on. Especially, if we wish to pry people away from already established careers.

At 0.15% and only 13.5% in circulating supply, I personally would be discounting the equity component quite heavily, purely due to the low circulating supply and that Index Coop is not yet 6 months young.

IMHO - I would like to see additional equity incentives be added, perhaps another 50% more equity. But without knowing how we come up with these numbers, it really is hard to say what is fair and if this approach is right.

5 Likes

If I remember correctly the equity stake is intended to be 0.15% of total INDEX per contributor.
That nets out to 60,000 INDEX tokens distributed over 2 years for these 4 hires.

3 Likes

Very pleased to see this proposal and the recognition of those four great Owls. :owl::owl::owl::owl:Well deserved.

I would vote FOR to get this moving, as I think in balance there’s positive value here.

Longer-term, I’d also love to understand more re:

  • Base salary: $6,000/month will make it hard to attract proven, high value talent with families in future in expensive locations (NYC,SF, LA, London, HK, etc). I’d be open to this doubling, potentially in conjunction with other elements of the package adjusting too

  • INDEX award: so, @dylan 15,000 INDEX/contributor, right? If so, seems like a good place to start

4 Likes

This is great, really exciting to see the IC having its first full-time contributors. Thanks for putting this together.

I will vote FOR the proposal and FOR the four hires, congrats to @LemonadeAlpha, @BigSky7, @verto0912 and @DarkForestCapital, well deserved!

However, I would also like to amplify what others have already alluded to. The financial aspect of the package presented above is rather conservative. While this is fine for now, as we are only just starting, I would like to see this getting re-evaluated at some point. As pointed out by @DevOnDeFi, the current proposal might exclude contributors with families or people in areas with high living costs from becoming full time contributors.

We also have to acknowledge that the above proposal does not include any fringe benefits. Not being “traditionally” employed could impose certain costs, for instance social insurance such as health insurance, pension scheme, unemployment insurance, etc., that are otherwise (partially) absorbed by an employer. I’d argue that we should include these costs - that come with being a full-time contributor - into the calculation in the future.

Nevertheless, it’s exciting to see this initiative of full-time contributors getting started. Looking forward to see where this goes and how the IC will grow through this new perspective.

6 Likes

Well done guys! I will be voting FOR the proposal and FOR the owls also!

I think a base reward + a performance-aligned equity incentive is a good approach offering both value to the coop and the receivers over the medium-long term.

It would be really interesting to see how other fintech start-ups (closest thing I could think of to a DAO!) etc compensate overall relative to these roles, responsibilities and risks.

Congrats again! :owl: :owl: :owl: :owl:

4 Likes

Great to see the convo develop around this! Given the initial reception, I have added a FOR and AGAINST poll.

Now to hitting some of the points shared in replies.

Yup! These were developed after researching how other top crypto communities retain & compensate full-time contributors, and in conversation with Coop community members.

This life situation you’ve laid out is one of many that will have to be taken into consideration moving forward :+1:

100%, a retrospective is part of this proposal :+1:

Right on & true. Working for a crypto protocol is certainly not the same as being traditionally employed. This will remain a consideration in future full-time contributor programs.

4 Likes

This is a great idea and will add longer term full time commitment to the project.

2 Likes

This is great, @gregdocter.

I’m seeing some conflicting understandings of the terms, so I want to make sure we’re all on the same page.

I read the terms to mean that each full-time individual would be paid out $5k per month in INDEX. There is no vesting for this component because they naturally need to pay for their livelihoods.

Separately, each full-time member will receive a grant today of 15,000 INDEX, which would be subject to a 2-year vest. That upside is worth ~$525,000 at the moment.

If my understanding is correct, my feedback would be that the token grant looks spot-on but the salary portion probably needs to be increased a bit. Now, I admittedly am biased because I live in NYC, and have NYC cost of living perpetually in my thought process - but I’m also looking to early-stage salary comps when I say it should be higher. I’d suggest something closer to $100k (particularly because there is no health care). If the salary figure moved up, this is an attractive package that comes with a high degree of risk but a potentially amazing return that these four can realize through their efforts over the two-year period.

6 Likes

You are spot on in your understanding of the terms :+1:

Re: salary, it certainly is a balancing act that will continuously need to be figured out. @DevOnDeFi referenced a similar use-case above.

Super helpful to understand your point-of-view here as we soon work to create a clear framework for how another class forms.

1 Like

Worth noting that there was a higher base / lower (but still generous) INDEX offer and that we opted for the lower base and higher upside given our respective life situations.

I would expect that the same kind of option is available and built upon in the future.

7 Likes

Just here to congratulate all the full-time contributors! All absolute legends and personally have been really helpful to my growth within the community and my career in general :raised_hands:t5:

5 Likes

This is awesome - fully in favor

3 Likes

Noting that I have just closed this poll after posting it 7 days ago.

Result: 100% FOR (29 votes)

Immediate Next Steps:

  • Begin implementation
  • Salaries will begin in April
4 Likes

Coming from other projects, those kinds of retention package are essential if you want to keep your talents !

Also voted yes

1 Like