BanklessDAO is a growing and evolving organization. As we scale, we will face new problems, but we will also resurface old problems.
One of those “old problems” is compensation  . In the past, we’ve slapped on bandaid solutions, like using Coordinape and 1000 BANK/hr as a back-stop against more challenging questions around complicated compensation guidelines.
Well, that backstop is starting to fray.
About a month ago, a handful of us met to establish the Compensation Working Group. While progress has been slow, we’ve made some definitive strides.
This post serves to surface some of our findings, expectations, and next steps.
One of the first things we did was canvas the problems, courtesy of @wolfehr. We spoke to a few groups (albeit not all of them) to surface some patterns and trends. The entire challenge statement can be found here, but some of the repeated concerns were:
- Lack of guidance for creating consistent comp structures that are equitable across all projects
- Lack of consistency for the same role held across different guilds
- Sustainable remuneration, both to retain talent and not burn through funds
- Comp should be tied to tangible work completed
No doubt these are just a sampling of the problems we truly face.
As with all things in DAOs, compensation is hard. We’ve seen a few models kicked around in the DAO ecosystem. The following tweet summarizes some of them:
The first topic of conversation was around the model we wanted to go with. There was pretty unanimous consensus that we wanted to have a flexible compensation model that was decided by “the market.” What does this mean? Each guild/project/initiative will determine their own compensation structure, which can be modified to fit their needs.
However, this does not mean there won’t be guidance.
Comp falls into two categories:
Compensation capture: How the dollar value is decided upon
- Market rates, milestone/KPIs, revenue share
Compensation distribution: How value accrued gets distributed to the team
- Coordinape, team set salaries, hourly, roles, UBI, bounties
The idea here is that we (comp working group) will provide guidance on how/when to use specific capture/distribution methods. For example:
- First Quest will capture compensation through market rates and milestones for completing objectives, then, given the small size of the team, distributed through Team Set Salaries (this is what we did for Season 1)
- BanklessDAO Consultancy will capture compensation through revenue and distribute a portion to the core operating team and distribute the rest to project teams
- Newsletter team captures compensation through KPIs (delivering on newsletters) and distributed through bounties (and donates all revenue back to the BanklessDAO treasury)
- Bounty Board team captured compensation through market rates and distributed funds using coordinape (for Season 1)
The point is, there are numerous ways to design a compensation package that best fits your team. With a decentralized compensation model (where each team decides on their own), it will never be universally fair. But the team-driven nature of a fluid compensation model means that you get to have a say in how you get paid.
There are two broad categories of guidelines:
- Global Compensation: Universal guidelines applied across the DAO
- Market rates, DAO-wide coordinape, standard guild bounties (Twitter campaign, blog post)
- Local Compensation: Soft guidelines for teams to determine their own comp models
The idea here is to provide global compensation guidelines to allow for teams to set their local compensation. For example, there are questions around:
- Do we set different market rates based on skillset? (Eg. Writing, development, design, legal)
- Do we stratify between expertise (Eg. Jr vs Sr Developers)
- Do we adjust market rates based on location?
There is still a LOT left to do. We’ve only barely scratched the surface. We have interview to conduct, research to do, forum posts to write, feedback to gather - rinse and repeat.
I’ll leave the specifics vague here as we still have to sync on a strategy going forward, but we’re hoping that in the first half of next season, we’ll have a concrete compensation framework that we can begin to implement in the latter half of Season 3.
A quick note here: When talking to some frens at Yearn, I had an interesting discussion as to the nature of a “Compensation Council.” The idea here was instead of having a top-down group that determines compensation, this Council would basically be a dispute resolution mechanism. The compensation council would create a framework document that teams would adapt to their local projects/guilds. If at any point, someone were to take issue with Project A’s comp plan, they could raise an issue with the compensation council and the council would evaluate if Project A did properly apply the framework. If not, they would work with Project A until a fairer comp plan was determined.
This way, the comp council isn’t actively involved in every decision, but rather serves to make sure that other teams properly apply the framework. This would also let the council note evolving needs and adapt.