YIP-115 Updating Compensation Procedures

The existing compensation guidelines were ratified in YIP-100, but should be re-evaluated based on the new work done in designing and implementing the Re-Org and the Gov-Ops council. This post serves to re-define the procedures moving forward. The original write-up on this can be found here .

Overview

The new compensation model developed in the Re-Org has 2 main parts. The application part and the payment part. In the application part, a contributor will apply for funding with specific deliverables and milestones that they aim to meet. These could be further broken down into monthly progress updates where a portion of the compensation is paid out after work has been open sourced, documented, and reviewed by token holders.

At the most basic, a contributor says what they plan to do and then at the end of the month they describe and show what they did in a compensation request post. If the work is finished, great! If not, they can describe what caused the slow-down and how they will move forward given the issues.

Once the post is up, token holders (or some delegated party) should determine if payment is warranted. As described here, this model is “optimistic” so it requires someone to dispute the payment request within a certain time period, otherwise it will be paid by default. If the request is not disputed then it will be added to the next on-chain proposal.

Creating a flexible system that is clear, legible, and fair is key to attracting and retaining contributors. Contributors are responsible for submitting reports on time and should have clear expectations for when that needs to be. The Gov-Ops council (specifically those who write the on-chain code) are responsible for keeping the schedule and including or removing contributors.

Parties Involved

There are 3 main parties involved in this process: Contributors (grant recipients), token holders, and governance facilitators (Gov-Ops members).

Contributors

This role was described in the overview. They are responsible for doing the work promised and submitting a compensation request for the work done. The timings required for this are determined by the gov-ops council and token holders and is the point of this document.

Token Holders

Token holders need to be aware of what scope contributors have promised and check to see whether the work done matches that scope. Any token holder can dispute a compensation request, pushing it to a vote. Token holders are also responsible for making sure that the initial scopes of work that contributors submit are reasonable and well defined so that they can be effectively reviewed when compensation is requested.

Gov-Ops

Gov-Ops is responsible for putting together an on-chain transaction based on approved, undisputed compensation requests. They are ultimately responsible for setting the deadlines for contributor reports since they control the timing of the actual payments. It is not Gov-Ops’ role to determine if a contributor should get paid outside of the defined rules for posting reports.


Payment Flow:

Work done by contributorssubmit compensation requestsreview compensation requestsdispute compensation requests (if needed)vote on disputes (if needed)create on-chain proposalvote on on-chain proposalexecute on-chain proposal.

  • contributor work is done during the prior month (or other time period).
  • X days to submit compensation requests
  • Token Holder review of the compensation requests occurs as they are posted and lasts for Y days after the compensation request cut-off. Disputes of and voting on compensation reports happen in this time-frame.
  • Gov-Ops then has Z days to make final updates to the on-chain proposal before proposing the vote.
  • The on chain vote proceeds per smart contract rules (currently 2 days of voting and a 5 day timelock).
  • Assuming the vote passes, any execution steps required can be completed by Gov-Ops.

Disputes

Disputes should be formalized by posting the rationale for the dispute on the original compensation request forum post, creating a snapshot vote, and posting about it on the discord.

Disputed transactions should only be removed from an on-chain transaction if quorum is reached and the final outcome of the vote is to not pay (not paying is the “for” vote). This means token holders can work with the contributor to correct their report during the voting period and abstain from voting if they feel the changes are satisfactory.

This way of organizing disputes allows them to be used as a way to enforce the norms of the governance system while giving the contributor time to fix issues or plead their case.


Specifications

Here, I will propose 2 options for the timing of the flow listed above: condensed and extended. Refer to the “Payment Flow” section above for more information about the general flow.

Condensed Timeline

  • Contributor Compensation Reports are submitted between the 1st of the month and the 5th of the month, documenting work done in the last month(s).
  • (optional) Gov-Ops posts a reminder for contributors to submit on the 4th.
  • Gov-Ops posts the on-chain contract for review on the 6th of the month.
  • Token holders have 3 days (longer if reports are posted before the 5th) to review the reports and dispute those they disagree with. Any disputed report is excluded from the current on-chain transaction and will need to be re-submitted in the following month’s review.
  • Gov-Ops has 1 day to make adjustments to the on-chain contract based on disputes and/or adjustments made in the review period.
  • The on-chain transaction is proposed on the 10th and takes 7 days to complete (2 days voting and 5 days time-lock).
  • Upon approval, Gov-Ops executes the contract and transactions.

Reviews of the compensation reports and on-chain contract are both done in 3 days. Contributors are paid ~ 2 weeks after submitting their reports.

Based on early feedback, the above timeline is preferred by E, Feddas, and jpgs.

A chart showing this timeline can be seen here:

Extended Timeline

Although the condensed timeline seems to be preferred, I will document an extended timeline below which has some different trade-offs.

  • Contributor Compensation Reports are submitted between the 1st of the month and the 7th of the month, documenting work done in the last month(s).
  • (optional) Gov-Ops posts a reminder for contributors to submit on the 6th.
  • Gov-Ops posts the on-chain contract for review on the 8th of the month
  • Token holders have 14 days (8th to the 21st) to review the reports and dispute those they disagree with. During this time, contributors can provide additional information to prevent disputes going to a vote. Any late compensation reports should be disputed by default.
  • Reports that are still disputed after the review period are voted on, starting on the 22nd, until the 28th.
  • After dispute vote are complete Gov-Ops will adjust the on-chain contract to reflect the outcomes.
  • The on chain transaction is proposed on the 1st of the next month and takes 7 days to complete.
  • Upon approval, Gov-Ops executes the contract and transactions.

Review of the compensation reports is done over 14+ days and review of the on-chain contract is done over 28+ days. Contributors are paid a month after submitting their reports.

A chart showing this timeline can be seen here:

Next Steps

Please review the above and leave comments on the general process and which option you prefer. If you want to see changes to this document or a process, please document them below. I plan to put this up to a snapshot vote on August 28th and whatever is chosen will be used as the process for the next compensation report period (September 1st)

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Sorry, I don’t understand the question.