DXdao Worker Compensation Guidelines 2020

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.

Should is a violent word.

maybe the compensation ratio of REP and $ (dxd, eth, whatever) could dynamically change depending on the existing amount of REP of an individual (the more $/less REP the more REP the individual already has)

I think this could “bind” newer contributers more to the dao and incentivize further committment, and also reward older more active contributers (with more REP) more financially by also keeping the REP more distributed and helping to avoid useres maxing out their REP)

I went through the the guideline: Wanna start with big picture before going into the details.

Commitment level:

  • That needs to be earned thru REP which will take 2 years OR 3 mthly financial compensations of DXD in vesting contract. How long would it take to fulfil that DXD criteria?

  • Seniority-based vs merit-based system: It would take a worker 2 years to prove themselves that they should earn as much as their peers just because they joined later. My worry is that this will put off people.

  • “Gigs” or Sprints: Some workers might be required/motivated to join for sprints (say 2-3 months) which we as DXdao need. The above system would not incentivise the highly-sought after people to come aboard.

  • Worker vs Advisor: In how far does DXdao have a policy to hire advisors if too expensive as a worker? Or for specific projects.

Incentivisation:

  • General: We have DXD that can be utilised to quantify progress. All funds or firms work with option structures that vest once KPIs have been hit. As a DXD-holder, I’d want to see the team being incentivised and/or be able to measure their progress.

  • Structure: Incentivisation can be tied to fee revs, DXD price, # of IDOs, omen pool size, investment volume OR return on investments. I am aware that none of these KPIs works perfect but there’s a way to take an average, or define “max(fees, DXD price change, etc)”

  • Quantum: DXdao can define an annual pool of DXD for their worker with equal/pro-rata shares.

Review:

  • Is there a review structure? What if worker get all cosy and slack off, miss deadlines?
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Please correct me if I am wrong but I have the impression that some workers’ remuneration structure pre-dates the guidelines. Meaning, their remuneration & REP is grand-fathered. In the spirit of “equal treatment”, is that considered fair by the community?