[Discussion] Compensation for Committee Members

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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.
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