[Discussion] Compensation for Committee Members

Introduction

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:

Objective

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.

Proposal Details

Roles That Qualify for Compensation

This compensation scheme applies to all elected members of the IMC, GMC, and any future committees that the pDAO formally approves for compensation.

Proposed Compensation Structure

  1. 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.
  2. 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.
  3. 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.

Weighting Compensation

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

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.

Google Sheets

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.

Timesheets

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.

Implementation

  1. Conduct forum discussions to receive input and feedback.
  2. Create an RPIP to formalize this within the RPIP framework.
  3. Hold a DAO vote to approve or reject the RPIP.
  4. Create a transparent reporting system/Dune dashboard to monitor compensation regularly.

Pros and Cons

Pros

  1. 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.
  2. Commitment: Monetary compensation can lead to higher contribution levels through increased time commitment time and consistency of output.
  3. Transparency: A formalized structure would be transparent and standardized, reducing any perception of favoritism or ad-hoc rewards.

Cons

  1. 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.
  2. Complexity: Introducing a compensation structure would add another layer of complexity to committee operations, although the time estimate for administering this structure is low.
  3. 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.

Next Steps

  1. Gather community feedback on this proposal.
  2. Modify the proposal based on the feedback received.
  3. Proceed to a formal DAO vote.
6 Likes

First: I have been vocally against this kind of stipend in the past. That was over a year ago, and I have to admit the status quo isn’t great. Given that – I’m gonna support anyone with the energy to drive and a reasonable plan to try out, and I think this easily hits that bar.

Thoughts on the status quo

In the time since that post I linked, we’ve frankly struggled to get enough active volunteers.

The latest GMC membership selection had 11 nominees for 9 slots; it had one specifically asking not to be chosen, one that wasn’t sure about their time availability, and there was definitely some work that went into getting people interested. The latest IMC membership selection has 12 nominees for 9 spots; it had one specifically note they could be a reliable signer but were too time limited for discussion, and it had a member that’s stepped down.

Beyond that, “active” hasn’t been a freebie either. If you look at hard metrics for the GMC or IMC, you’ll note there’s dramatic differences in communication and signing work. There’s also differences in other work, even if it’s harder to record. Here, one of the things I liked about the status quo (as a volunteer, any work is positive) may actually be a liability (there’s nothing driving a “floor”).

On to this post proper!

  • On the stipend, is “expected monthly hours” meant to be a floor, mean, median, or something else?
  • Re coingecko pricing, I’m cool with that (or any other reasonable system), but would love for a replicable way to get an answer. Maybe this is a simple api query and then “average those numbers”? My first instinct was “use a huge Uni TWAP”, but liquidity vs USD doesn’t have particular support, so CG might do better.
  • The streaming thing is a bit weird to me… so if a person getting $750/month serves for 1 year and doesn’t run for re-election, they’d get: 12*350 + 350*6 + 350*(5/6) + 350*(4/6) + 350*(3/6) + 350*(2/6) + 350*(1/6) = $7475? Whereas someone continuously running gets $9k per year? Seems a bit odd tbh… is it intended to reward stability? I’m onboard with cutting off stream (and upcoming period pay) for getting kicked, or even leaving partway.
    • If we removed the “failed to get re-elected” bit, an almost identical thing can be achieved by escrowing the first 2.5 months of pay to be paid out if someone leaves in good standing.
  • Weighting
    • This is hard
    • I can almost guarantee there will be significant feelings here.
    • We should consider the pros/cons of anonymous voting on weights. My vote is on anonymous here. As much as I like transparency, I worry about rifts (more to do with the judgement than the money, tbh). I think from a quick look at the coordinape docs that you cannot tell who did and didn’t allocate to you unless people write notes?
6 Likes

I’m torn on this. On the one hand, I understand the frustration of volunteering for a necessary job no one wants while being critiqued for your work ethic. On the other, paying the GMC what they are worth will get very expensive very quickly.

If my math is right, at current RPL price, the GMC gets just over 1M USD per year in inflation. This program would be a cost on the order of 110,000 USD per year. Add in the GMC administrator position and we get 155k/year or 15% spent purely on administrative salaries. During our October lows, this would be ~26% of GMC funds being paid for administration, which is well above reasonable non-profit levels.

I wonder if the 15 hours/month is now an overestimate for minimum time given the new administrator’s position? I think maybe paying for the minimum required time spent may be more appropriate- 1 hour subcommittee discussion, 1 hour debrief, 2 hours to go through grants and for other misc voting, 1 hour to confirm outflow transactions etc. Obviously, most members do a LOT more than this, but these are also people who would do more for RP anyway.

I think you could pay based on objective metrics without any reliance on a peer review process (which would itself be another process you’d need to reimburse for). Then, if someone didn’t go to the debrief or didn’t vote or didn’t confirm the transactions (this is already being tracked) they wouldn’t get that stipend that month; and obviously people doing less than the minimum routinely should reevaluate their position.

I would also say that the best way to align incentives is to denominate pay in RPL- ie if GMC is driving value to rocket pool, their salary goes up. And if RPL value is dropping, the pDAO is not on the hook for oversized administrative outflows.

Lastly, if the pDAO has an appetite paying ~100k per year in ongoing stipends to improve GMC performance, it is probably reasonable to think about funding research for how to decrease the time burden on GMC members, as this onetime cost could pay for itself within months.

Anyhow, I’m writing this from the bath so sorry about the formatting.

4 Likes

I agree with several points above. Overall, it would be good to get more involvement. If we could do that without RPL incentives, we should consider that. One thing I wonder is whether some don’t run because they feel the committees are representing the protocol well enough. To be honest, even I ran only as another option, not necessarily to replace anyone. Still, because of members needing to step down occasionally, it’s best to have more options to have alternates. Plus, some may only want to serve for one term every few years, there should be ability for some rotation IMO.

I do also think the percentage of budget potentially paid out for administration is too high. So, either or a combination of a discounted rate and perhaps estimating fewer hours is likely in order. Given that members receive 0 today, starting with half of the proposal above might be better. It’s still should be a level that would entice more people to consider “volunteering”.

Not sure about IMC, but GMC is pretty well laid out for work milestones (subcommittee meet, research / scoring, retrospective, txn execution). One that is more nebulous is discussion / engagement outside of the meetings. If we’re going to weight, I’d rather see it closer to participation metrics for the milestones rather than timesheets, but that’s one opinion.

I don’t really love the streaming idea. I think it adds complexity for not much (or any) upside. People have already run for, been elected, and contributed to the committee, how much more alignment do they need to prove? I get the idea, but these are all pretty aligned community members, no need to do a retention program IMO. Perhaps consider the entire hold back idea to be the half that gets removed, to bring the administration percentage of budget more in line.

Also, I feel like Epineph should get at least 1 RPL for writing a forum comment from the bath. I chuckled at that, unlikely you’ll see bath time comments from me :wink:

3 Likes

Thank you for picking up this initiative @Patrick_J

I would advise rewarding on the lower end of the range with the mindset of increasing the compensation over time if the future data we collect warrants it. The idea being that there’s less friction increasing an individual’s pay rather than reducing it.

This is a very much work-in-progress document that I created to start detailing the administrator’s responsibilities. It is still in the data collection phase and far from the final product, but at this point in time it should serve to give a general idea of an individual GMC member’s responsibilities. That said it’s difficult for me to provide accurate estimations for the admin’s average time spent and even more difficult for me to provide accurate estimations for GMC members time spent.

I encourage committee members to correct and provide feedback where they see fit.

3 Likes

Thank you for the comments. We (GovAlpha) want to emphasise that this is intended to be a collaborative process with the Rocket Pool community, so we welcome all positive and negative feedback to build this proposal into something that works for the DAO.

Yes, it’s meant to be a rough guideline rather than dogmatic. Mean or median would be reasonable here.

I considered using an API, but the nice thing about using CoinGecko is that it is reproducible and reasonably accessible compared to calling an API or Uni TWAP. Over a large enough range, it gets smoothed out reasonably well anyway. Theoretically, this makes it easier for anyone to compare answers and effectively monitor the process. We’re not wedded to CG; we can change this if people feel strongly.

Yes, exactly. It’s intended to reward stability, improve alignment with the protocol, and encourage medium-to-long-term performance, as other committee members or the pDAO should remove poor performers, therefore forfeiting their remaining streams. It is definitely “simpler” not to bother with this and to make lump sum payments monthly, but this approach has added benefits. Again, not wedded to it, it can be removed if people feel strongly enough about it.

This is also a pretty workable alternative. It would certainly need a definition of leaving in good standing to be agreed upon, but it would be a workable alternative.

You can turn off the ability to view how other circle members have ranked during the allocation process, but once it’s finished, it will become visible to everyone within the circle.

On the other hand, not paying the GMC what they are worth may result in them no longer wanting to continue in the role at all. There is a balance to be found here.

The estimated number of hours may be an overestimate. Based on speaking to members of the GMC, I suspect the number of hours worked by each member has quite a wide variance, so it was difficult to pick a precise number. ShfRyn has provided some valuable data on hours expectations in this comment.

The other option for reducing outlay is to, of course, reduce the hourly rate. We went with $50 as a rate that is very much achievable for people of the GMC’s caliber in the web3 space. We could consider a reduced amount as an initial introduction to gather more accurate data on the actual outlay. Do you know a rate that would seem reasonable to you, @epineph?

The problem with this approach is that these are bare-minimum objectives, as you point out. By extracting data from the rest of the committee on how much they think everyone else contributes, you can get a greater sense of who is doing the work to a high standard. It creates an incentive to put in more effort than a bare minimum that meets the objectives, because your input should directly result in you receiving more of the output.

The peer review process shouldn’t take too long. It could probably be done in less than 30 minutes of focused work since you simply assign a weight to each committee member with optional annotations to explain your reasoning.

The problem with denomination in RPL terms is that if there is a big pump, you can quickly end up with a significantly higher USD-denominated outlay, which can also be controversial within the community - see the discussions over the oDAO payments over the past year. Similarly, a dump due to macro-factors results in the members receiving far lower pay than they were expecting, through no fault of their own. Using a moving average price does a good job of smoothing this variance on both the upside and the downside. Again, if people feel strongly, we could trial this with RPL-denominated pay, but I suspect that we’d be semi-frequently revisiting this as the price of RPL moves with (or against!) the market over time anyway.

This is great feedback. Thanks. It’s certainly possible to start with a lower amount in USD terms and see how that goes. The numbers in the post are indicative and certainly not “set in stone”.

Yes, capturing the nebulous engagements is the tricky thing we hope the proposed system could solve. Who are the people talking with prospective applicants and reviewing their applications before they are posted? Who is actively contacting community members doing good work to recommend that they apply for grants? Who is proposing bounties? Etc. We want to design a system that rewards participation in the “humdrum” committee activities while rewarding those who go above and beyond, which is why we’ve recommended the weighted voting approach.

This seems to be a recurring theme of the feedback. We will probably scrap this unless we get feedback saying people love the idea.

This is helpful. Thank you for providing it.

1 Like

Yep, i agree with many of your points!

So I would say- the whole thesis behind the GMC is that people who are not working will start working if you pay them, and will perform better work if you pay them more. But like everything else, it’s complicated. Some people want recognition, some want a simple thank you, some want a seat at the table, some want to be listened to, some are true believers in the product, some want to go home knowing that they did a good job; many want other things entirely. Joe may just want people to leave him alone so he can roll out the next smartnode release.

So I think an amount above “disrespectful” is reasonable, particularly since we are starting at zero, as rocknet stated. I think 30-50$/hr is fine and appreciated, at the lower end if we look at estimating actual hours, upper end for minimum hours (i would normalize it internationally, but i think the GMC has 8 from the USA and one member from an even higher cost of living country). I think best case scenario is we start a reimbursement system and see more competition next election; however, if we don’t see more competition our sole conclusion should not be “we are still not paying enough.”

I personally don’t like the idea of being in charge of the payment structure of my peers- it seems less effective than an honest backchannel conversation (i mean, it can be anonymous, but there’s only 8 possible people, so if you are getting a 6/10 average that’s just passive-aggressive feedback from your peers). As rocknet said, it is also extremely hard to monitor the amount of time other members are spending doing the things that are ‘extra’ (like a member going through the online presences of applicants or doing back and forth negotiations or reviewing finished projects) - so people who are less vocal about their activities may be penalized. Based on this, I still think reimbursement based on easy objective measures makes the most sense (ie, epineph didn’t show up for the research meeting, so the 50$ budgeted for his attendance gets redistributed). You could consider something like a monthly award for one committee member who went above and beyond that month as an aspirational goal.

While it is true that a RPL pump gives outsized salaries with RPL denominations, to me that’s one of those good kinds of problems; the bad problem is a RPL dump with USD denominated reimbursement. Perhaps using a RPL and USD hybrid reimbursement will smooth that out both directions?

1 Like

For some reason, I can’t edit my top-level post in this thread. Following a break over the winter holidays, the proposal has now been revised, and the new version can be found below.

Summary of changes:

  • Reduced “hourly rate” to $30.
  • Removed token streaming component due to marginal gains and the large increase in complexity.
  • Moved more firmly in favour of Coordinape as the optimal solution for the Committees’ needs based on public and private feedback.
  • Various spelling, grammar, and syntax fixes.
  • Added clarification that a member does not necessarily receive the listed hourly rate.
  • Next steps updated.

A diff of the changes can be found here: Stipends update - Diff Checker


[Discussion] Compensation for Committee Members

Introduction

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:

Objective

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.

Proposal Details

Roles That Qualify for Compensation

This compensation scheme applies to all elected members of the IMC, GMC, and any future committees that the pDAO approves.

Proposed Compensation Structure

  1. 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 * $30 * 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 450-600 USD/month/member for the GMC. The number will likely be lower for IMC members since their estimated hours are lower. This also protects committee members against rapid adverse price movements by smoothing out variance.
    In practice, committee members’ share may be higher or lower than the hourly rate if a solution such as Coordinape is utilized; see below.
  2. 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.
  3. Monthly payments: Payments should be made using lump sum payments simultaneously as GMC distributions occur. A member’s first month of payment will be held in escrow by the GMC and paid out if the member leaves in good standing.

Weighting Compensation

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

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. Alternatively, 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 used by the application to decide 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.

Implementation

  1. Conduct forum discussions to receive input and feedback.
  2. Create an RPIP to formalize this within the RPIP framework.
  3. Hold a DAO vote to approve or reject the RPIP.
  4. Create a transparent reporting system/Dune dashboard to monitor compensation regularly.

Pros and Cons

Pros

  1. 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.
  2. Commitment: Monetary compensation can lead to higher contribution levels through increased time commitment time and consistency of output.
  3. Transparency: A formalized structure would be transparent and standardized, reducing any perception of favoritism or ad-hoc rewards.

Cons

  1. 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.
  2. Complexity: Introducing a compensation structure would add another layer of complexity to committee operations, although the time estimate for administering this structure is low.
  3. 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.

Next Steps

  1. Write up in RPIP format with any additional changes based on this re-draft.
  2. Hold a snapshot vote on the implementation of RPIP.
2 Likes

EDIT: My understanding now is that the suggestion is pay is denominated in USD, but paid out in RPL. This makes sense to me and the below (original) argument does not apply.

Original:
I worry that denominating pay in RPL does not work for a number of reasons.

  • Work by the IMC / GMC absolutely affects the price of RPL, but I view it as a long-term impact (on the order of years)
  • We will be electing new members periodically, and members may only stick around for a year or two. They will not have a lot of time to profit off of past performance
  • [I assume] We do not want new members elected to have their compensation based off of past member performance. This would mean normalizing RPL payments to current prices every election cycle, and conflicts with the above points
  • RPL price is exceptionally volatile, and I do not see the performance of the IMC / GMC as being nearly as dynamic as RPL price. I see high potential to repeat what happened with oDAO funding, both on the upside and downside

I think the work performed by members should be valued in USD for its stability. If it is important to ensure members to have aligned incentives with RPL price then we should find ways for members to have capital in RPL, such as an RPL bond or electing NOs who run minipools.

1 Like

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.

It appears that Patrick suggested recalculating on a monthly basis. If I’m interpreting this correctly, it seems like there wouldn’t be significant exposure to volatility in that approach.

1 Like