This post is intended as the precursor to a more formal proposal detailing a structured compensation framework for members of the Incentives Management Committee (IMC), the Grants and Bounties Management Committee (GMC), and any future pDAO committees. In broad terms, the aim is to support and encourage volunteer work through a system that rewards the time, effort, and expertise contributed by committee members.
In addition to various Discord-based discussions, some previous forum discussions on this topic include:
The primary objective is to use a small stipend to incentivize productive membership of these committees, which are instrumental in developing and managing the Rocket Pool ecosystem. We do not intend that this will be sufficient to fund full-time roles.
This compensation scheme applies to all elected members of the IMC, GMC, and any future committees that the pDAO formally approves for compensation.
- Fixed Monthly Stipend per Committee: A set amount of RPL or stablecoin is set aside for payment to committee members throughout the active period (i.e., the period between elections). These funds should be dispersed between members based on relative contributions to the committee (see below). The committee should calculate the amount of funding for compensation in USD terms using the following formula:
Committee Total (annual) = Expected Monthly Hours per Member * Number of Members * $50 * 12
This formula estimates the annual expenditure for members of the committee. The sum of all payments during the active period cannot exceed the Committee total. Each member’s compensation should be calculated every month. An estimate of 15-20 hours per month results in 750-1,000 USD/month/member for the GMC. The number will likely be lower for IMC members since their estimated hours are lower.
- Payment Currency: It is preferred that committee members receive their compensation in RPL rather than stablecoins to increase alignment with token holders and the Protocol. To maximize long-term thinking, the value of RPL should not be calculated at the spot price but based on a 6-month moving average using the closing price from Coingecko. The moving average should be recalculated monthly before new payments are made.
- Token Incentives: Long-term token-based incentives will align the committee members’ goals with those of the Rocket Pool community. Our proposal is for 50% of pay entitlement to be paid immediately, with the remainder streamed over six months using a tool such as Llama Pay (other methods for streaming funds are available). Suppose members voluntarily leave the committee, fail to achieve re-election, or are judged to no longer uphold the role by the rest of the committee or a broader pDAO vote. In that case, they should forfeit the remainder of their stream when they leave the committee.
In practice, this would result in a monthly flow whereby 50% of the fee is transferred from the committee’s multisig to each member, and the remaining 50% is entered into a six-month stream. If other members do not think a member has committed sufficiently during that month, they should not receive any pay. Note, if using Coordinape (see below), this method may not be possible if the native Coordinape payment option is chosen.
It has become clear from discussions with several members of the community that the current committee structures and membership have resulted in an unequal division of labor. Consequently, we propose that compensation is flexible across all committee members. The committee may use several methods to decide on payment amounts. Here are three options that may be appropriate, although feedback is welcome.
Coordinape is an out-of-the-box application that allows collaborators on a project to weigh each other’s performance
relative to the other collaborators on the project. By asking all collaborators to rate each other, a dynamic weighting of each member’s contributions can be produced based on the opinions of their peers. The committee can use the results of this process to either make payments using the application directly (in any ERC-20 token) or generate a CSV that can be used to create multisig transactions. Using the application directly increases the gas costs of payments since the tokens need to be deposited into a Coordinape vault. Then, each committee member must execute a transaction to withdraw their share. An exported CSV would allow a single transaction to be constructed and executed using the committee multisig.
Committee members could rank each other’s contributions once monthly (each payment period is termed an epoch in the app), and this data would be the data that decides how much each member deserves to receive for their work. For example, User D could rank that User A deserves 50% of the pot, User B deserves 30%, and User C deserves 20%. This would be combined with the weight input by each User, and a final tally would be generated. It also allows the generation of time series that provide data about who consistently contributes the most (and the least) to each committee, which may be helpful data for voters during the next election cycle.
It is possible to replicate the function of Coordinape in Google Sheets. This has some benefits in that it is simple to set up and intuitive to use and does not require the association of an Ethereum address with a third-party application. However, it comes at the expense of UI/UX and data tracking and the time cost of maintaining the sheets.
Either of these options would likely be effective in allowing the committees to reward quality work.
The most straightforward implementation would be time tracking and timesheets to assign payments to committee members. However, the negative to this is that it does not necessarily reward the quality of contribution and is possible to spoof. It is much harder to persuade your peers that your contributions deserve higher weighting than those of others if they have been of lower quality.
- Conduct forum discussions to receive input and feedback.
- Create an RPIP to formalize this within the RPIP framework.
- Hold a DAO vote to approve or reject the RPIP.
- Create a transparent reporting system/Dune dashboard to monitor compensation regularly.
- Incentivization: This work is currently done on a volunteer basis. Introducing a small stipend will likely increase the satisfaction levels of those within the roles, attract other interested parties to contribute, and improve the satisfaction levels of those trusted with these roles by the pDAO.
- Commitment: Monetary compensation can lead to higher contribution levels through increased time commitment time and consistency of output.
- Transparency: A formalized structure would be transparent and standardized, reducing any perception of favoritism or ad-hoc rewards.
- Budget Constraints: Allocating funds for compensation would reduce the available budget for other initiatives. In practice, both active committees have sizeable amounts of funds available.
- Complexity: Introducing a compensation structure would add another layer of complexity to committee operations, although the time estimate for administering this structure is low.
- Value Alignment: Financial incentives, if not carefully structured, could misalign committee actions from broader community objectives. The risk is low since the proposed amounts are not overly large.
- Gather community feedback on this proposal.
- Modify the proposal based on the feedback received.
- Proceed to a formal DAO vote.