YIP-100 Upgrade Contributor Compensation Process

YIP-100 Upgrade Contributor Compensation Process

Basic Summary

Improve and streamline the way we pay contributors to improve efficiency and accountability.


Abstract - What am I proposing?

Change the compensation model so that contributors are paid more like contractors and less like employees. Shift the requirements to get paid to the contributors by requiring a “request for compensation on the forum.” Pay in both stable-coins and YAM will be distributed monthly.


Motivation - Why am I proposing it?

See this post for the full discussion around the compensation model.

Issues with the current compensation model from the linked post:

  • The YAM vesting doesn’t work as intended: The idea of the YAM streams was for vesting to occur over a 3 month period. But this implies that the YAM earned for the last month would vested over the next 3 months. Instead, the YAM to be earned over the next 3 months is streamed in real time.
  • Accountability requires additional overhead from the HR group.
  • Transparency reports are not seen as important (based on how quickly they are filled out) and require that the HR group coordinates and pesters contributors to fill them out.
  • There is limited ability for contributors to work a flexible schedule that varies from month to month because the rates are set beforehand.
  • There are limited opportunities to do work via different models (bounties, milestone based compensation, etc).
  • YAM voters rely on a small group of contributors to make sure that work is being done efficiently and that all contributors are working effectively.
  • The DAO risks becoming an “employer,” which could lead to regulatory issues.
  • Doing all compensation via on-chain transactions via full governance adds overhead and complexity for paying contributors.

Moving to a new model will clarify the interactions between contributors and the DAO, allow more transparency, and pave the way for a more decentralized future for YAM.


Specifications - How am I proposing it is accomplished?

These changes will need to happen in multiple stages to realize the full benefits of the program. But each stage on its own will yield its own benefits. This proposal is for the first stage.

Goals

Before we get into the full specification, lets lay out what the goals of our contributor compensation program are.

  • The Process should be transparent for contributors and token holders.
  • Contributors should be held accountable for the work they do and not be able to “game” the system
  • Contributors should be fairly rewarded for their work.
  • Payment should be incentive aligned.
  • Payments should be for work that has already been done.
  • The process should require as little overhead as possible from contributors and token holders to achieve the above goals

Stage 1

Enforce the following process for contributors who do work for that DAO:

  1. Those who wish to contribute to the DAO will post to the forum with their initial proposal. It should describe what they plan to work on, expertise, and an hourly rate (guidelines should be provided). This information can be ratified via snapshot voting, and is very similar to the current procedure where a contributor will “apply” to governance.

  2. At the end of a pay period (monthly), all contributors who have done work that month and wish to get paid will have 7 days (the first week of the new month) to submit a compensation request to the forum, outlining the work that they have done in the prior month and confirming the rate and total amount. These requests are like public timesheets.

    • The requests will be reviewed before being added to the contributor payment transactions
    • The requests also serve as transparency reports and give insight into what each contributor has been doing.
    • Contributors who do not submit a compensation request by the deadline will not be paid in that month’s transaction and will have to wait until a later transaction.
  3. Upon receipt and review of the reports, contributors will be paid in YAM and Stable-coins for the work they did at their pre-determined rate. Both the Stable-coin and YAM portion of their pay will be paid directly without using a stream. The price of YAM will be determined based on the 30-TWAP determined on the last day of that month. The work to create the on-chain proposal to pay contributors should take no more than 1 week (7 days).

Prerequisites to implement Stage 1.

  • Determine hourly pay rates for existing contributors and ratify through snapshot.
  • Create a general hourly pay scale for new contributors to use as a reference for future work.
  • Create forum post template that contributors can use to submit requests for compensation.
  • Create documents to clarify this process for contributors, developers, and community.

Addendum

The above is the scope of work for this stage of the update. Future stages could include:

  • Creating a multi-sig to pay contributors from.
  • Creating an optimistic governance process for the contributor payment multi-sig to allow more oversight from token holders.
  • Re-implementation of streams in a more incentive aligned and impactful way.

Poll to Measure Sentiment

Snapshot vote is up here: Snapshot

Open until Sunday, 1/16/2022 at 5PM.

@ross, excellent proposal. I help put together, based on team input, the original contributor compensation over a year ago and there are many aspects that worked initially but didn’t pan out as expected. Thank you for doing the necessary work to figure out what worked and didn’t work and offering up an alternative.

Feddas

1 Like

The snapshot vote passed with 77% voting yes. Implementation has begun. After internal discussion, this process to pay contributors will go live at the end of February (to pay for February contributions). For January, I recommend that all contributors submit their transparency reports in the same way that they will submit compensation requests in the future. Think of it as a low stakes dry run.

A new Contributor Compensation category has been created with templates for compensation requests and reimbursable requests.

We will most likely start off paying hourly rates that reflect the current pay monthly rates until we can figure out what the best way to do the hourly rates is and whether they need to be adjusted. This is an ongoing process and we are figuring it out as we go, so I encourage anyone with questions or comments to voice them as it will help us all.