YIP-84: Update to Contributor Compensation Guidelines

This is a proposal to update the contributor compensation framework for those who are working full and part-time for YAM. It increases the % of pay that can be received in stable-coins and changes the vesting period for YAM earned.

To understand what is changing, I recommend reading this post: Analysis of Current Compensation model

Goals

I propose to create a more standard and simple model where contributors can elect to be paid mainly in stable-coins, up to a predetermined cap, while always maintaining a portion of their pay in vested YAM. The core goals of this proposal are:

  1. Contributors being able to pay their bills.
  2. Contributors core pay not being affected by market fluctuations (unless they want it to).
  3. Making sure contributors have some of their income exposure in Yam to help align and incentivize.

Details

  • Pay will continue to be broken down into 2 portions: Stablecoins and YAM.
    1. All contributors will be able to take up to 70% of their pay in stablecoins. This is their base pay and is expected to be sufficient for the contributor to pay their bills. This will be paid in the stablecoins, either DAI or USDC.
    2. The rest is an incentive payment in YAM, which has a new vesting graded vesting of 6 months similar to how SNX rewards are vested (linear vesting begins 6 months after YAM is earned).YAM is deposited into the stream at the beginning of the 6 month period and is inaccessible for 6 months. Once the 6 month mark has been hit, the stream starts and the funds are released over the next 6 months.
  • YAM quantities paid out will be determined based on a 1month TWAP similar to how it is currently done, but streams will be funded on 6 month intervals (same length as vesting start).
  • If a contributor wants to receive a larger percentage of their pay in YAM, they can do so without vesting (30% will always be vested). We expect that contributors who do this will not sell their YAM immediately.

Implementation

This proposal is to create a framework which we will then apply the current contributors as streams end and need to be updated. After discussion, this framework will be put up for a snapshot vote. Once approved, a separate proposal will be made to apply the changes to contributors. Assuming it is approved before Oct. 1st, then it would be applied to the contributors whose streams end then. “OG” contributors streams end in December and these changes would applied at that point.

The stream mechanism may need to be updated to allow for the 6 month delay in vesting. Dev work will be coordinated to make that happen.

Poll

  • Yes, Update Compensation Per this Post
  • No, Don’t update (please explain why in comments)

0 voters

The percentage may need to be altered. One of the very long time problem of this project is everything the team do is isolated from the token price. This causes many problems: 1. most of the community left due to lose money. 2. No one wants to hold YAM makes the governance process less decentralized. The pay cut from the decrease of the YAM price is the consequence the team should accept as it comes from their own decision and work.

Increasing the percentage of the stable coin will lead to a result that team will not care about YAM price at all but only work for a monthly salary. Then YAM as token has even less meaning to exist. The highest percentage of getting stable coin could be reduced to 50%. At least, contributors should receive 50% of YAM.

Hi @siriusye, thanks for the reply. 50% is the current percentage, so that would just be keeping things as is.

The issue that I am trying to balance is: “how much YAM compensation is enough to align incentives?” with “What do contributors need to earn to pay their bills?” This is not an easy question and depends on the specific contributor. If a contributor does not earn enough stablecoins to pay their bills, then they need to sell YAM in order to do so. This is a bad outcome for all parties because it lowers the price of YAM and reduces the incentive alignment of the contributor since they don’t have that YAM anymore. In that case, they may as well have been paid in stablecoins directly.

So then you may say: “Make it so the YAM can’t be sold immediately (vesting).” Now, if the stablecoins aren’t enough to pay bills and live, and the contributor can’t use the YAM to pay them, they can no longer afford to work for the DAO. They will either leave or ask for more money. Both of these options could be avoided by paying more in Stablecoins.

Based on conversations with contributors, 70% hits the sweetspot based on our pay scale for people that live in expensive cities. This is the amount that allows them to pay their bills without selling YAM. It is also adjustable so people who live in place that are less expensive, or who don’t need stablecoins can take pay in YAM. A number of contributors have asked to take more than 50% in YAM. Some take only YAM. This proposal gives the flexibility we need to hire and retain contributors effectively.

Whether you make 50% or 30% in YAM, an increase in the price is always beneficial to someone getting paid in YAM. And working for a monthly salary is what pretty much all of the world does. Most people get paid entirely in currency and still work hard every day. Every contributor for YAM could be doing something else right now, but we are here working for the DAO because we believe in it and want it to succeed. Driving people away who care about the DAO because the price went down is short sighted and will not lead to greater success in the future.

And if no one wants to work for YAM then good luck with token appreciation. I want to make YAM somewhere that people want to work and contribute because I believe that is what will make the DAO successful in the long run.

Here we have an interesting point, how much is enough for contributors.

YAM is one of the high paid project as far as I know. I am working for other projects, they pay community mangers 200 dollars a month, where YAM used to pay 1200 USD.

For developers, the pay is high too. I have a master degree in Computer Science + a few years into a CS PhD and quit + 5 years working experience, I can only earn 10k USD before TAX a month.

So to be honest, I think the team is over paid in general as most of people don’t have a long term experience on what they are doing. Only considering the living expense is not comprehensive for this problem. Also living expense can be very different too. I am living in one of the most expensive city in the world. I can live on an average life style and with a reasonable amount of saving.

Keep increasing the compensation will make YAM token useless and attract more work-for-the-bill kind of people. I think a good project need people with passion to gain more with a bit risk. This is what YAM is currently lacking.

To be clear, this proposal does not increase anyone’s pay, it only changes the potential allocation between stable-coins and YAM.

I also want to state that no one on the team makes more than 10k USD / month if you don’t include YAM, with the highest USD portion being 10K exactly for our lead dev and then added YAM on top (5208/mo). Most full time contributors, after this change would make closer to $7k/month with ~$3k in YAM. This comes out to $84,000/year in stablecoins, which is not a particularly high number in the tech world, especially in cities. With a masters and PHD + 5 years experience I’m pretty sure you would make more than that working in London, NYC, or San Fransisco. All of this is before tax.

Projects paying their community managers $200 a month are being exploitative and I have no idea why anyone would accept that.

There are numerous other DAOs who are working on these issues:
DXdao here, although I think their split should be weighted toward stables more. Others Agree in the comments: DXdao Compensation Structure Overhaul - June 2021 [Draft Proposal] - dxDAO - DAOtalk

Here is a link for Otis: https://www.withotis.com/ and here are their pay guidelines: Otis Compensation (Public) - Google Sheets

You can read a thread on IndexCoop’s pay structure here: IIP-36 Full-Time Contributor Retention 🦉 - #10 by Metfanmike - Proposals - The Index Coop
The index coop proposal pays all in Index and at a pretty low base rate that people in the comments mention should be higher (I agree) but gives a pretty big long term bonus with 2 year vesting.

Also remember that there are no benefits included in these packages so those of us who are working full time need to acquire benefits separately. Of course this varies by country, but in the US, this is a significant expense (sometimes $1000 a month or more).

The current landscape of crypto means that all developers are constantly being temped by other organizations with large war-chests. Everyone needs developers now so they are in high demand. If we hope to be competitive with hiring and retaining our devs then we need to be able to offer competitive compensation to the rest of the market. Furthermore, recruiting someone to come work at YAM is not quite the same as the big projects like Aave, YFI, etc so we have to compete on salary because we can’t necessarily compete on pedigree.

The project was a star project. But the team never cares about the token price and think they can maintain the marketcap by building products. Building products can help with the token price unless the token economic is included in the product. No one actually considered this at all, then the project becomes a small/unpopular project.

Now team is asking for more stable coin because their YAM salary is decreasing due to their own decision. Selling YAM is never a problem if you guys can attract people to buy and use YAM token. Simply keep the current compensation structure and build something that uses YAM as the token.

Also, why team has to be in US, you can recruit people from all over the world. People can be cheap and good in some area.

We seem to have a clear difference of opinion on where the value of YAM can be found. I strongly believe that it is in the products we are building, and therefore in the people designing and building them. The token price is a representation of how the market feels about the project as a whole, but is not rationally connected to the reality of the project. How else can you explain it being $5 a few months ago because there was 1 project that allowed staking for a farming event which we had no idea was even planned? YAM was no different then, but was valued at 5x the price. Now the price is $0.80-ish and everyone is upset and want’s to punish the contributors for this price drop. But we have no control over these swings and all we can do is continue building and growing the project.

Token economics are of course very important, but they either rely on inflation funding or actual revenue. We have very little revenue, so adding in a mechanism to return that revenue is not going to make any difference to the system. I fully understand that we do need something and we will have something in the future. But right now the value add is in making products that earn money because that should have multiples more RR. In order to build products we need to have people who want to build them, and that requires competitive compensation.

The assumption that the token price is going to skyrocket immediately is just silly. We are building an organization and that takes time and effort. The vision of the current contributors has been expressed multiple times via forum posts, medium posts, and all the votes that we have. It is all right there in the open for anyone to see. That is what we are building toward because we think it will increase the value of Yam in the long run. At this point, if you do not believe in that vision you should either sell your tokens or come up with a different vision and try to get funding for it. Just yelling at contributors because they are not doing things fast enough is not productive.

The team is located all over the world. But we pay according to the market and not according to where people are. We want to hire the best available people so we need to pay enough that we can do so, whether they live in an expensive place or an inexpensive place.

There was an entire year to prove building products will NOT add value to YAM token. Keep talking about longer vision wont help at all especially in the high pace crypto world. Also token economics include many things, burning, airdrop, stake/mining, buy back, create usages/utilities, listing on exchanges and more creative ways of using the token, most of those things do NOT require funding except a contract deploying gas. Team decides NOT to build token economics should accept the consequence of the price dropping.

Also, YAM is an new and small DAO organization which lack of monitoring, it shouldn’t provide a comfort environment for people want to find a job for bills. If people take more stable coins, under the current NO monitoring environment, they can just do nothing and post some progress to hollow out the treasury. If you’ve ever worked in tech startups, it normally pays less cash and give more shares or options. People should work towards the target to make shares worth more. It is not a governance job.

For the “best available” people, I simply doubt about this, there is much more to do for the recruitment. Early stage recruitment was just people volunteering in the community, then some of those people who wants to step up become the team. There was no interview, no selection at all besides of some of the programmers.

1 Like