DXdao Worker Compensation Guidelines 2020

Augusto, thank you for start this important topic. I want to share my view on dxDAO worker compensation guidelines based on your proposal.

  1. I am agree with Monthly Financial Compensation Table. It is looks fair.
  2. I am not sure that REP valuation is correct. I see some risks for creating devs “mafia” who will earn salaries and hold REP deciding what size of salaries is.
  3. dxDAO controls more than 1m of USD assets. REP is a specific asset with value. If REP holders vote for proposal shutdown dxDAO and distribute assets to REP holders 1250000 REP points = 1000000 USD in this case or 1 REP=0.8 USD.
  4. In other hand dxDAO need more participants and dxDAO is open for new members.

My proposal is

Monthly Financial Compensation = Experience Level * Commitment Level

Month Rep Compensation = 500 REP

Total Month Compensation = Month Financial Compensation + 500 REP

Lets say 12 devs work for dxDAO during 12 months. They earn fair market salary in USD (ETH , DXD payment) and 72000 REP points is distributed between devs in equal proportion 500 * 12 * 12. This is good bonus to market salary. Is not it?

And I think if worker agreed to receive DXD instead ETH for month salary payment he can earn bonus +10% in usd value. It is a signal that worker believe in dxDAO products and future DXD value. Worker decide themselves what is DXD ETH proportion of his salary.

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Hola @ykplayer8, thanks for the review and reply! Im surprised to see that the REP distribution you are proposing is a less than a 10% of what was already proposed and discussed by the community in the document, thats a huge difference :eyes:

By dev “mafia” you mean technical contributors that are working with worker agreements that were approved by the dxdao community and reviewed by them? This “mafia” is not the most important REP holder group, but certainly a very important one in the DXdao community, since they are the REP holders with the necessary technical and experience to help the community make good technical decisions, and products :slight_smile:, this being said, my opinion is that DXdao should distribute this technical REP carefully.

DXdao will follow the REP holders distributions making sure that no worker gets a higher REP than the maximum allowed, In the doc a REP % limit of 4% is proposed, I think with this limit and a constant issuance of reputation we will build a healthy community.

BUT in order to make the compensation guidelines as flexible as possible I can change the document to not specify a fixed monthly REP compensation, but recommend a range of values, like the between 0.2% and 0.5% of monthly REP compensation, where the worker should explain why he choose that amount in the proposal. @ykplayer8 thats better, what do you think?

I think we will start seeing this type of proposals once the DXdao decides on what the DXD is going to be used, if the community agrees on use it to pay workers.

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Hola a todos, I made (hopefully) the last changes in the DXdao Worker Compensation Guidelines documents. I came up with a simple equation that based on how much time we consider that a worker should be working full time to reach the highest commitment level, where the worker reputation would be near the max REP allowed.
Taken in count that DXdao is in early stages and there is risk involved I used 2 years as that time. This will allow the DXdao identify the interest of the workers to be part of this awesome experiment since they will have the option to commit themselves into a program where they can be technical REP holders with experience and stake in the organization.
The guidelines still provides various ways to earn more REP, and I estimate if those extra REP is received by receiving less financial compensation or bonus REP after reaching some goal a worker can reach max REP in a year.

Document with comments enabled in google docs

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Amazing work Augusto and all. I am fine with the doc as it stands. I think it is fair and clear.

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Signal Proposal to Validate DXdao Worker Compesation Guidelines 2020 v1.0.0 has been submitted

Signal Proposal

Document Link

Document History

Voting matters, if you agree with the document please vote :slight_smile:

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I’m now seeing proposal linking to those guidelines and asking a compensation of 12 000$ per month (144 000$ per year).


Even if people able to provide this amount of value can exist, they are extremely rare.
Except exceptional cases (extremely productive individual who can sometimes produce themselves what a whole team would), I think the dxDAO should be cautious with its finances and refrain to pay those kind of compensations.
I think the dxDAO should offer market based compensation, but here looking at the first proposal, it looks like people are requesting 2 times the market value for their work.

I can understand that some people may have done some unpaid/low paid work for the dxDAO before and in this case I’m not against them asking a bonus (which would match the compensation they are asking in those proposals). But asking these kinds of compensation on the long term would be putting a bad basis on the compensation of dxDAO workers which is likely to be carried over (if they are approved, people will keep asking similar amounts afterward even when they don’t compensate for previously unpaid work and newcomers will use those numbers as basis).

I also think people should come to the dxDAO mainly because it aligns with their goals. In addition to carrying financial risks to the dxDAO, this could lead to attracting people seeing it as an opportunity to profit from the dxDAO due to its high recent raise. Due to REP given to them, this could even have a snowball effect.

I would also like to point that here, the whole dxDAO is basically acting as a startup founder. And one of the really important but hard part of being a startup founder is to say no most of the time.
It may actually be even harder for a DAO to be able to say no often, as the discussions are public and the discussions about whether or not you think someone can provide a specific value are gonna be seen by said person.
But I think it’s crucial to the success of the dxDAO to be able to do so.

I am also wary of drawing people to DXdao for the wrong reasons. The DXdao should be attracting people who share a passion for its mission.

Note that the max that can be paid anyone per month in ETH is $8000 ($96K per year) and the rest is either REP or DXD in 2 year vesting contracts paid at a value equivalent to the curve minting price which is the same as the all time high. The higher proposals referenced (mine being one of them) are asking for $6K per month in ETH, and the rest in vesting DXD. Neither recipient can request REP because they are over the maximum limit. The higher ETH/DXD compensation makes up for no longer being able to earn REP.

That said, $144K per year does feel a bit beyond the means of DXdao given the stage its at, and I would be fine lowering my ask. However, I was following the compensation guidelines arrived at in this thread (after much deliberation), so I think we need to be specific about how the worker compensation guidelines should be modified. For instance, should there be a “total compensation” max of something like $10K per month? And we should also be mindful of keeping the DXdao’s most dedicated and experienced participants motivated even after they have “maxed out” their REP earnings.

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Thats not what is happening. The guidelines where design a way DXdao can create worker-organization stable relations by issuing REP for their work, by doing this more REP get distributed, and a “simbiotic” relation is created between the worker and the organization is created. It also distribute REP to workers that earned it, and it does not give REP to workers that already reached their max REP stake.

So here you have to compensate somehow to those workers who are already in commitment level where they cant receive more rep. The worker guidelines establish a maximun compensation in USD and gives the workers an option to change the REP they received for ETH or DXD.

So yes, the max compensation according the guidelines, but if it is high when it is well deserved, if you as a worker reached the maximum commitment level proves that you have been doing a pretty good job and you already established a good relation with the DXdao by being an active member, therefore a high compensation is deserved.

But again, this guidelines provide an estimation and the workers proposals can be rejected if an over-compesation.

If it was REP which is not monetary, I wouldn’t mind. I don’t think REP as a reward but as having to be distributed to get the best governance possible. Having REP is a responsibility, in particular it’s a responsibility toward DXD holders who invested.
Here, however we are seeing DXD which are traded tokens and even if the price you quote is slightly below the real price, that would still amount to a 136,800$ compensation.

I don’t think there should be a maximum compensation, sometimes extremely productive individual work may be worth 144k$/year. I may have encountered one, but those are really rare.

I would go to only add 1/3 of the base compensation when this is labelled in DXD. But to add it even if rep has reached its cap.

I don’t think the proposed REP compensation is wrong. I think that converting REP which are governance rights into DXD which are cash at such a high conversion rate leads to compensation which are almost 2 times the market rate.

That’s why I think the guidelines have to be modified. Because even if it may not have been obvious to people reading them the first time, they in practice lead to 144k$ yearly compensations. I don’t think this was the intended effect.

The dxDAO is still at a startup-equivalent stage. In a few years with highly successful products and adoption I wouldn’t mind. But currently, those compensation corresponds to C-level executive of companies which are way past the startup stage.

I’m really confused now because the salaries being asked are bigger than what’s on the WCG chart.

And to think this whole thing sparked because it was seen as “excessive” that developers were asking for $2k a week for a short-term (like 6-8 weeks) project.

Now it’s ok to ask for a rate of over $2500 per week for a year?

This max pay rate should have been in the chart as well, because this chart in the WCG is truly misleading and is about to pass in 24 hours. I feel this is honestly misleading the community.

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It is important to read the worker proposals correctly.

For example my worker proposal for the next two month is requesting $6000 per month (which is the right compensation for a person with a commitment level 6 and expert status) which would be $1500 per week and not as you stated $2500.

The fact that I reached the max amount of REP already and probably will not request any REP for a long time leads to shifting the compensation to a vested DXD payment which will be locked for the next 24 month.

I used the worker guidelines to define my compensation. If there are issues with my worker proposal we should change the worker compensation guidelines accordingly.

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I didn’t say you specifically were requesting over $2500 per week. But it came to my attention that according to the WCG it actually is feasible to ask for $12k monthly per year.

That’s quite a jump from what anyone has asked for in the past. The whole point is to be budget conscious. And now that at least a half dozen people in the DAO have earned in REP on average what it would take a person 3+ years to earn, they can take advantage of such a head start and double their monthly salary. I don’t really think it’s budget conscious to allow that opportunity for the 5 or 6 people to request the equivalent of half our ETH treasury in a year.

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That’s quite a jump from what anyone has asked for in the past.

Yeah because in the past the DXdao had no treasury at all and compensation was not based according to any worker guidelines.

The whole point is to be budget conscious.

It is not only about budget consciousness but we also introduced a REP limitation per worker which lead to finding a way to compensate those who already contributed a lot to the DXdao which got rewarded mostly with REP not with money.(because there was no money) Now that those folks reached the limitation there needs to be compensations for those who already reached that limit.

And now that at least a half dozen people in the DAO have earned in REP on average what it would take a person 3+ years to earn, they can take advantage of such a head start and double their monthly salary.

Again, you need to be careful about what is actually the salary here. The DXD tokens are vested for 24 months which start to be partially accessable after 6 months. I would def. not see this as the same thing as getting liquid Ether.

Sure you can think about the current full time developers taken advantage of it, but bear in mind that those developers actually made sure that the DXdao is where it is. With that, it could be seen as the compensation for having strong skin in the game in the early days. Reducing the compensation for those who contribute the most will set precedent how the collective values workers actually reaching the max of REP.

It seems like no one actually realised that a few workers already reached the limit of the worker compensation guidelines just because they contributed full time since the beginning.

I don’t really think it’s budget conscious to allow that opportunity for the 5 or 6 people to request the equivalent of half our ETH treasury in a year.

I believe workers who take the risk and request half of their compensation in a non-liquid asset which is locked for 24 months is budget conscious.

If we make sure to distribute REP to new workers/contributors in the coming months we can make sure that those who have reached the max amount of REP possible will get deflated resulting in the possiblity to request REP again for their compensation.

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Just an update, we are working with @JohnKelleher on new changes to be done on the worker proposal regarding compensation calculation, thanks everyone for their feedback, this is a work in progress on a hard and hot topic but I think we are doing a good job as a community and organization on it.

Important thing to remark is that another proposal submitting the changes on the worker compensation guidelines will be done in case the changes are applied.

I will propose the changes to be discussed on the next community dev call on Thursday, looking forward to see you there.

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Hi all. This is indeed a tough and important conversation. And personally, I appreciate everyone’s patience and feedback as this gets worked out. With input from some of the others on this thread I have put together a doc which makes a couple of adjustments to the compensation guidelines and is hopefully easier to understand.

The main change is using a “flat rate” for the “Monthly REP to Money Conversion Rate.” The effect here is to reduce the maximum and increase the minimum amount of total value of compensation. It also specifies the amount of REP compensation you can convert to cash, and the conditions where you can substitute vesting DXD. Please add feedback via comments and hopefully this will help DXdao arrive at a more widely accepted and understood worker compensation guidelines.

I imagine it will take some more time to arrive at consensus on updated worker guidelines. In the meantime, I plan to submit my overdue worker proposal according to these. If the guidelines that end up passing proposal are different I will amend my worker proposal (which will only ask for half of the compensation up front).

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Anyone may choose to convert up to half of their REP earnings to cash (paid in ETH or stablecoin). At the current Monthly REP to Money Conversion Rate of $4500, this is up to $2250.

I’m sure this will highly incentivize workers to take cash over REP. What effect would this have on decentralization?

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It depends of the time horizon we look at. If tokens are given at a “discount” because they are delivery between 6 months and 2 years later, this is not being budget conscious. Because the dxDAO would overpay in the end.
Giving assets at a discount because they are paid later is normal when there is a risk that the assets would not be paid (like the dxDAO being bankrupt). Here the dxDAO has signifcant DXD holdings and the assets are leaving the dxDAO control immediately, so there is no risk of workers not being paid their DXD.
Not being able to access assets immediately comes at a capital lockup cost (what they could have earned with this DXD by yield farming for example), but it may be something which could cost like 10% of the DXD earned. But even assuming that the DXD is valued 10% less because of capital lockup, the compensations would still be way too high.

There is a potential risk in the value of DXD which could be reduced. But there is also a potential reward in the value of DXD which could increase. Overall the best estimation of the DXD expected price when its delivered is its current price.
Giving DXD with a lockup is basically equivalent to forcing workers to keep a minimum DXD share so that their incentives are aligned.

If the workers think that DXD is overvalued and they only accept it as a discount, their motivation for the dxDAO would be questionable and that would send a wrong market signal.

Of course we can’t force workers to take too much locked-up DXD because they need to pay for immediate expenses. But the USD part we’ve seen in proposals is enough to have a really good lifestyle (happiness from lifestyle stops increasing after 60k$ per year). And the extra DXD part can ensure that the overall compensation is competitive as long as workers don’t think DXD as being overvalued.

Yeah, I agree, I don’t think people should ever have make choice between REP or money. REP should be granted for effective governance.
Classic orgs don’t let people choose between having voting rights in their ORG or money. They may choose between stock or cash but the stock is a source of cash.

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There is a potential risk in the value of DXD which could be reduced. But there is also a potential reward in the value of DXD which could increase. Overall the best estimation of the DXD expected price when its delivered is its current price.

Which was always the case based on the worker compensation guidelines. Please read the guidelines carefully before talking about any discounts. Workers who request DXD for their work will need to have it vested over 24 months with the current all time high price of the bonding-curve (dxtrust.eth.link). There are no discounts!

Giving DXD with a lockup is basically equivalent to forcing workers to keep a minimum DXD share so that their incentives are aligned.

those guidlines are not forcing anything. They are guidelines/recommendations and workers can decide whatever they want for compensation.

If the workers think that DXD is overvalued and they only accept it as a discount, their motivation for the dxDAO would be questionable and that would send a wrong market signal.

Workers who request DXD as compensation take a huge risk to

  • Get the All time high price from the bonding-curve which may never reached again on the open market
  • have it locked for 2 years

Of course we can’t force workers to take too much locked-up DXD because they need to pay for immediate expenses.

That´s why workers actually get paid in USD/ETH, so they can pay for real life expenses!

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Good point! This is something we need to see playing out. If we see that basically everyone is requesting cash over REP:

  • they will not have any increase in compensation level = lowest level of salary
  • After 1-2 months the collective can decide that the worker has no skin in the game and just reject his worker proposal if he/she continues to just care about money and not the collective
  • The collective will make sure to change the worker compensation guidelines!

At the end of the day, those are guidelines and the collective should try to have it “flexible” so we can learn and iterate!

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I’m not speaking about selling DXD against USD/ETH at a discount, I’m speaking of giving more DXD for some work compared if it was given in USD which is also some form of discount.
If you believe that 6000$ of USD and 6000$ of DXD is not equivalent to a 12000$ compensation but less, you are applying a valuation discount to DXD.
How much USD would you accept to replace the 6000$ of DXD? If you answer anything below 6000$, you are applying a discount to DXD valuation.

I don’t think you got the point I’m trying to make. Since locked up DXD cannot be sold directly, it’s effectively equivalent to forcing workers to hold DXD. Having some tokens locked up is equivalent to being forced to hold them. I don’t think this to be a controversial statement. And I don’t think that forcing workers to hold the DXD for sometimes is a bad thing, that ensures those are aligned incentives.

I don’t think we should take the all time high price into account as it basically gives a disincentives for having the price goes high if it can be reduced afterward. I think we should look at market prices.
Having it locked up for 2 years still gives an expected value to the reward equivalent to the current price.

There is no disagreement on that. The USD/ETH part of the remuneration seems pretty consensual.