0xDAO Community Treasury Proposal #1

TL;DR

We propose an operations model, team, and budget for a six-month, experimental initiative funded by the community treasury. The overall goal is to actively drive value creation and capture for the 0x protocol. We explain our thinking behind the proposal and why we think the community and broader 0x ecosystem will quickly and sustainably benefit from the initiative.

Introduction

Recognizing the ever-changing dynamics and increasing competitiveness of the broader cryptocurrency environment, the 0x community ambassadors propose an ambitious, experimental initiative focused on value creation and capture for the 0x protocol and its broader ecosystem. We’re confident that taking a bold approach upfront will create an immediate source of differentiation for 0x and enable us to most efficiently and effectively allocate community treasury funds. More importantly, if successful, we envision this initiative will turn into a sustainable source of meaningful, long-term value that will accelerate the flywheel of reflexivity and help to manifest the larger vision for the 0x ecosystem.

Background

The 0x protocol’s mission is to create a tokenized world where all value flows freely. After years of development and cultivation, it is clear that the protocol has achieved significant product-market fit.

0x Protocol has now enabled over $15B in trading volume across more than 250,000 unique traders worldwide while powering the backend exchange infrastructure for dozens of top DeFi applications. Additionally, with the token economics originally introduced in v3 of the 0x Protocol, the network has generated over $2.5M in fees paid to ZRX holders and market makers, underscoring the value that the network can create while aligning long term incentives for token holders and network participants alike.

(source: https://blog.0xproject.com/0x-labs-has-raised-15m-to-bring-decentralized-exchange-markets-to-a-global-audience-e374c29c6ac1 note: total fee number updated here from the original)

Recently, the protocol began to actualize a phased approach for evolving into a multi-chain, crypto-economic primitive. As the prime developer of the protocol, 0x Labs has positioned itself well to drive and execute this technological maturation.

In parallel, with the establishment of the 0xDAO and the community treasury, the 0x community is now positioned to take a more active and accountable role in protocol development.

We initially felt that a grant program – similar to those that other protocols are implementing – would be the right first step for our community treasury. However, after putting more thought into it we’ve concluded that taking a more aggressive approach could provide additional flexibility to proactively seek out and invest in high value-add projects in a way that aligns incentives across stakeholders and maximizes our strengths. Specifically, we believe that an initiative that leans more towards “venture” than “grant”:

  1. Allows us to take a more proactive posture by ensuring we’re not entirely dependent on reacting to incoming proposals,
  2. Builds critical experience and skills for long-term protocol governance, and
  3. Provides a greater degree of strategic flexibility and speed-to-execution as we identify opportunities in a rapidly-evolving ecosystem

To be clear, we still expect grants to be a part of what we do, but not the only thing we do.

Purpose

Leveraging the 0xDAO community treasury, best practices from strategic innovation methodologies and frameworks (such as Jobs To Be Done, Design Thinking, Lean Startup, etc.), and a scrappy team of community members, we aim to deliberately – and with rigor – begin the process of direct community governance with an initial focus on ecosystem value creation and capture. Passage of this proposal will formally authorize the initiative and provide funding for operations.

Scope

Using the contextual framework described above, we have loosely categorized potential areas of experimentation below. Initial prioritization will be determined by the team and the strategy they develop once the effort is formally established. We welcome and will continue to actively seek out community input. It’s important to note that this list is meant to be illustrative in nature, and not meant to be all-encompassing or presented in any sort of priority order.

  • Adding features and improving protocol functionality
  • Performing tokenomics review, optimization, and potential revamp
  • Incentivizing and improving support for new and existing market makers
  • Providing liquidity to select ZRX pairs
  • Incentivizing order flow and trading volume, including via relayers, dApps, etc.
  • Improving the user experience for staking
  • Building and updating developer and user tools, including documentation refresh
  • Developing more sophisticated research and analytics capabilities
  • Assisting with dApps and new integrations, especially projects using order books
  • Experimenting with new business models and monetization paths, including new use cases for Mesh
  • Strengthening our community through outreach and rewards
  • Ramping up marketing
  • Driving support for strategic initiatives
  • Conceptualizing and executing social media campaigns
  • Hosting and advertising 0x hackathons
  • Engaging with emerging developer communities, such as BSC, Polygon, Solana, etc.

Operations

In considering the scope and how to best execute to achieve our intended goals, we sought input from the community regarding operations models. Augmenting the feedback we received with our own research and observations, experience, and vision of what this optimally could be, we’ve landed on a model that has a full-time lead who will be responsible and accountable for overall administration and day-to-day management; a core team who will drive strategy development, execution, and decision-making in their areas of expertise; and a council who will assist as needed and approve the disbursement of funds (most likely via Gnosis Safe multisig). Like many successful funds, we also plan to enlist a small group of external advisors to provide a more expansive perspective and to perform oversight.

Using this model to jumpstart our efforts does not mean that the community will take a back seat – quite the opposite, in fact. We’re hoping this approach enables us to proactively create opportunities for the discovery, acceleration, and synthesis of pathways to high-impact outcomes, while also expanding the opportunities for our growing community to be active participants.

To get started, the team will identify our most immediate needs, gaps, goals, and opportunities and create a strategic plan and roadmap that’s aligned with 0xLabs and the broader 0x ecosystem. We expect this process to take no longer than 2-3 weeks. Then, using proven innovation strategies and techniques, we will begin executing on the plan. As a preview, our discussions to date have uncovered opportunities in marketing, integration, trading/liquidity incentives, and other areas that we expect to include in our strategy and execution planning.

Part of our ethos in establishing this effort is to empower community members who have demonstrated operational capabilities, maintained a sustained commitment to growing the ecosystem, have demonstrated a willingness to dedicate the time required, and have expertise in domains that are critical to our desired outcomes. Initially these consist of innovation strategy and execution, marketing, finance, and engineering.

With that in mind, we propose the following:

Lead: @nikita
Core Team: @SonofPegasus, @0xSHA
Council: @JoaoCampos89, @gabririgo
Advisors: @mintcloud + others TBD

In the spirit of bold experimentation, we propose that compensation should maximize skin-in-the-game incentives through the use of crypto-native constructs wherever possible. To this end, we propose basing compensation in the protocol’s native token (ZRX), and we intend to use a streaming distribution mechanic (such as Sablier or Superfluid) to facilitate compensation payments. While we acknowledge that using a native token for baseline values is somewhat provocative and may result in significant swings in USD value – both to the upside and the downside – we feel strongly that this type of experimentation is crucial for learning and informing future efforts. Importantly, crypto-native funds and projects that have implemented a similar approach of compensating directly in a native token have had early success.

Budget

In determining an appropriate budget, we reviewed the budgets and best practices of other projects and considered our unique needs and goals. As a result, we feel we’ve landed in a place that feels “right” for us, and is the best balance of short-term aggressiveness and long-term prudence.

Currently, the community treasury holds 2M ZRX and the external development pool holds 103M ZRX. While 0x Labs has indicated an openness to allocating additional funds to the community treasury from the development pool in the future, we intend to operate this initiative with the goal of becoming self-sustaining, rather than a cost center.

Using a compensation rate comparable with other projects ($100), and with the goal of incentivizing long-term value creation, we propose that the lead, core team, and council be compensated at the rate of 73 ZRX per hour. We arrived at this number using the average price of ZRX over the past 180 days (data source: CoinMarketCap), weighted towards the most recent 30 days as shown below.

We estimate initial “startup” costs – including legal review and various costs related to fund disbursement – to land in the $40k-60k range. Importantly, while the team will be incentivized via native token compensation, expenses will be calculated and disbursed in USDC (or another USD-pegged stablecoin).

Not knowing when the expenses will be incurred, for budgetary purposes we are using the last 30-days ZRX price average ($1.82) as our reference point. We expect that some of the efforts undertaken will not incur discrete costs (other than team compensation). Additionally, we leave open the possibility of using supplemental treasury funds for potential initiatives (e.g., liquidity provision), which we expect would be subject to a community vote.

Timeline

If approved, the effort will begin operating shortly after the proposal passes and will run for a period of six months (26 weeks), at which time it may be extended or modified by a community vote, or will simply expire, depending on learnings and results. If warranted, interim adjustments may be made prior to the end of the six-month period via the on-chain governance process. Progress, operational, and outcome metrics will be reported to the community on a regular basis.

Success Metrics

We expect success to be measured objectively and subjectively. Specific metrics will be developed as part of the strategy formulation process.

For instance, the lists below are notional, but objective success metrics could include:

  • Level of community engagement
  • Performance against metrics for workstreams
  • Number of ecosystem partners
  • Number of engaged external developers
  • ZRX trading volume

Additionally, subjective success metrics could include:

  • Improved sentiment and goodwill within the community and broader ecosystem
  • Improvement in 0x’s brand and positioning in the market

Conclusion

The DAO as a concept is still nascent and rapidly evolving, and we’re in an ideal position to capitalize on the learnings, successes, and failures of others while still being early enough to shape what “best-in-class” looks like. While lofty and aspirational, our desire for this initiative to explore the true potential of a community-run DAO aligns well with the ambitious vision set forth by 0x Labs. They’ve done an incredible job laying the foundation; it’s time for us to help blaze the path forward.

While there’s much work to be done over the next six months, we anticipate that the community and broader 0x ecosystem will quickly benefit from this initiative. Even though it may feel like we’re “building the airplane while in flight,” we’re confident that there’s plenty we can do right now that will add noticeable, high-impact value to 0x stakeholders, even as we iterate, experiment, test, and learn. We hope all stakeholders are as excited as we are for this next step in our shared journey, and we look forward to hearing your feedback, answering your questions, and further improving this proposal before it is submitted for a vote.

10 Likes

Nikita,

Fantastic work. I went over the proposal thoroughly and you and the team have my blessing!

Drew

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It’s really nice to see this initial effort to decentralize the protocol and hope this can evolve in empowering the community and sharing value with all ZRX holders!
Specifically regarding this proposal I definitly agree with the general tone and ideas, the intentions seem good, altought I have to say it seems also a bit vague in the language used and it is not very clear to me what this “venture” and “more aggressive” approach concretely means.
I believe and hope that after the first 2/3 weeks this will be clarified in more detail.

Regarding the team operations, maybe it would be useful to clarify better how it is going to work; specifically I was wondering if the lead role of @nikita requires to be full-time since the beginning?
Also regarding the compensation, it seems a bit weird the choice to use the last 180days, while
for expenses the proposal uses 30 days. I would suggest to use that also for compensation.
I have to say, also considering we are in a obvious bull market, the current compensation for the lead seems a bit high.
Considering the price of the last 30 days (1,82$) it’s yearly compensation is 276348$.
If ZRX price should double in the mean time, that becomes more than half million $.
Also while I have seen @JoaoCampos89 and @gabririgo involved in previous 0x communities call, are you @nikita anonymous? Would help me if you could share more info about your profile and skills to justify such a compensation (maybe this was done in the past and I missed it).
I know @nikita has been very active and helpful in the communitiy for a long time and I believe that should be rewarded, but maybe separately.
Also if we decide to proceed with a compensation in ZRX (rather fiat currency), than I believe that should be tied to a vesting period and maybe to some concrete objective related to increase value for all ZRX holders.
I believe starting this decentralization effort with a more easy approach, to see how things go, and then may be ramp it up progressively, rather than dropping half a million on a single community member, would be wiser, especially considering the community partecipation has never been that high.
Hope this helps.

1 Like

Thanks for the feedback! To address some of your comments and questions:

We strongly feel the initiative needs a full-time lead from the onset due to the myriad tasks involved and the level of effort that will be required to operationalize the various workstreams. Complex, cross-functional efforts don’t come together without someone deliberately structuring and actively managing them, and the work done at the beginning (which isn’t always visible) will be a large factor in the overall success of the initiative over time. We’re highly motivated to come out of the gate strong, so some elements of our plan are already in motion. Starting slowly on a limited-time initiative is, in our opinion, a recipe for mediocre results and/or failure.

Regarding the different price reference points for compensation (180 days) and expenses (30 days), some of the reasons we chose this approach include:

  • We plan to operate the initiative as a business and for budgetary planning purposes, we chose to set the cost reference for our budget in ZRX (1 ZRX = 1 ZRX), rather than have a continuously fluctuating capital expense cost basis.
  • The total length of the initiative is 180 days, so using the 180-day weighted ZRX/USD price average for compensation seems logical/fair. This normalizes the price reference cost basis and incentivizes the team to deliver sustainable results.
  • The people who are contributing human capital to this effort have all demonstrated a long-term personal investment of time and effort, along with a clear commitment to the mission of the protocol. Choosing a ZRX/USD price reference tied to only the past 30 days seems unfairly arbitrary given the volatility over time in crypto markets.
  • Expenses, in comparison, are short-term, discrete costs paid in return for services/products, and generally will be requested and paid in a stablecoin (converted from ZRX), which is why the 30-day average price was used for budgetary planning.
  • The overall goal of the initiative is to accelerate and amplify value creation and capture across the ecosystem so that all stakeholders benefit.
  • This is an experiment.

The compensation rate is the same for all team members and is comparable to other protocols, as is the number of hours for the different roles. Because this is not an employer/employee arrangement, compensation does not include any benefits, tax withholding, etc. Additionally, vesting is generally used to incentivize a sense of ownership and long-term commitment, which we feel has already been demonstrated by the team members selected.

I (@nikita) am anonymous and choose to not publicly disclose specific details about my background, but I have extensive experience and skills related to the work that will be involved in operationalizing and managing this initiative. I have shared some details of my professional background and qualifications with the other team members as part of the proposal preparation process, and some of the work I have been involved in over the past year is publicly observable in the Discord, 0xTracker, forum, blog, etc.

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Hi Nikita, thanks for your message and providing additional details.
I do agree that coming out of the gate strong is important. Because the other team members, in the proposal, have an effort of 7 hours I guess you will also be working with the core 0x labs members?
I’m curious about the idea or running this initiative as a business… could you guys provide more details about that? where would the revenues come from?
In general, as I mentioned earlier, the intentions seems really good and agreeable, but the lengthy text seems sometimes a bit vague and overloaded with “corporate-speech” and buzzwords, in my opinion.
Regarding the compensation, I would be in favor of a separate compensation for the effort you have obviously demonstrated so far, but as long as this proposal goes, it might be misinterpreted as an easy 6 or 12 month golden exit strategy.
I’m doubtful that if we were in a bear market, where there is the same volatility but in the opposite direction, the proposed compensation would have followed the same structure.

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I love the strategy and believe additional funds will be needed to sustain the momentum that this team will start.

Below are a couple of questions that come to mind from your proposed improvement ideas. I hope these questions help you continue to formalize and adapt your strategy.

  • Adding features and improving protocol functionality

Will the 0x team still be working on upgrading the protocol as well?

  • Performing tokenomics review, optimization, and potential revamp

How do you feel about fee burn or token burn?

  • Incentivizing and improving support for new and existing market makers

What types of volumes do you see from market makers by the end of 2021? Are you engaging with market makers at SIG as I see they are an investor in the DEFI alliance?

  • Providing liquidity to select ZRX pairs

What pairs do you see having the most traded and why?

  • Incentivizing order flow and trading volume, including via relayers, dApps, etc.

What are the current monetary incentives for relayers to use 0x?

  • Improving the user experience for staking

What about being able to stake directly from compound?

  • Building and updating developer and user tools, including documentation refresh

How many developers are building on 0x today?

  • Developing more sophisticated research and analytics capabilities

Would you be partnering with 0xtracker for this?

  • Assisting with dApps and new integrations, especially projects using order books

How well does 0x play with native apple or android mobile applications?

  • Experimenting with new business models and monetization paths, including new use cases for Mesh

How does layer 2 change 0x’s current monetization path?

  • Strengthening our community through outreach and rewards

Why is the 0x community not as culty as some of these other tokens?

  • Ramping up marketing

How much money is spent on marketing today?

  • Driving support for strategic initiatives

How do you get Mark Cuban to talk about 0x?

  • Conceptualizing and executing social media campaigns

How do you get Finematics to do a video on 0x?

  • Hosting and advertising 0x hackathons

What success stories have come out of past 0x hackathons? Why have developers stopped working on these projects?

  • Engaging with emerging developer communities, such as BSC, Polygon, Solana, etc.

What about private networks like SCRT? How do private transactions play in 0x’s future? How does the team feel about zero knowledge proofs?

Hi @nikita thanks for putting together a detailed proposal. Danial (@d4bba from Twitter) here. Can you clarify one point - in the image below I see that the budget allocated to this 6-month experiment is 300K $ZRX. Am I reading that correctly - that the total amount to be spent on this initiative will not exceed 300K $ZRX?

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Hello @0x1 ! Correct; we would come back for additional authorization (vote) for funding above that level.

Thanks for your input @Brianmorgan ! Lots to digest here :grinning:

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Yes, we will be working closely with the 0x Labs team and ecosystem partners (both existing and new).

WRT “running the initiative like a business,” as part of a goal to become self-sustaining, we are looking into ways we can invest/stake some of the treasury funds to earn returns that at least offset our costs. We’re exploring other ideas to generate “revenue” as well, including grants from other protocols.

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Hello and thank you for putting this first proposal together. One aspect that serves attention is the budget allocation section which proposes payment with the native ZRX token at your unrealized value calculation. I would like to express caution when calculating the proposed value of the ZRX token. Based on a comparative model of development factors, and project function metrics against other functioning projects within the space, the analysis renders the ZRX token to be extremely undervalued. Therefor it would not be advantageous to peg the token value to an average that is based on unrealized value. It is a good idea to keep away from pegging an assumed value to the ZRX token at any time. The value needs to be based on realized value. Realized value fundamentally should always be increasing exponentially as the value of the network exponentially increases with the tokenization on boarding paradigm. In conclusion the ZRX budget payout needs to be based on a floating scale which converts the amount of hours to be paid out against the current market price value of the ZRX token at the time of payment to meet your hourly rate evaluation based on your USD calculation target amount.

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Thanks to all the DAO delegates for putting together a detailed proposal - I’m sure it took a lot of time and effort.

As I’m sure many of you know, in financial management schemes (VC, PE, hedge funds, etc.), the nearly universal rule of compensation for fund managers is typically “2 and 20”, i.e. 2% of AUM and 20% of profits. As a crude example, if a fund has $100M in AUM and returns 10% of that in a given year, the fund managers will charge the LPs $2M (2% of $100M) + $2M (20% of $10M) = $4M.

The 2% is meant to cover the fund’s operational costs no matter what the profits look like on a short-term basis, and the 20% is meant to align incentives.

Fund managers are paid to allocate capital on behalf of LPs. Similarly, the DAO is compensating the initiative’s leaders to allocate capital.

Under this proposal, the DAO’s cost to deploy 300,000 $ZRX is 135,280 $ZRX, or 45% of “AUM”, leaving 55%, or 164,719 $ZRX available to deploy. In other words, each $ZRX costs approximately 1 $ZRX to deploy. I feel that this is too high.

DAO leaders should be compensated well, and I do not think the only solution is to lower compensation. One option would be to drastically increase the capital being dedicated to the fund. As an example, at 1M $ZRX, the cost to deploy this capital would be closer to 13.5% of “AUM”. I am aware that this is an experiment, and therefore devoting 1M $ZRX to this fund would have its own difficulties. If that is the case, I just don’t feel that the structure of this initiative as it stands today is workable, and I would respectfully ask that the community reconsider this approach.

1 Like

Hi Danial,

Thanks for taking time to respond to the proposal. Reading your response, we may be conflating two different things here. What you’re referring to is a model most typically deployed by hedge funds or other types of investment funds. This is more of a 'strategic endeavor, and there’s no “20,” - that would imply that the team would be taking some sort of cut of profits. Everything we’re doing is to strengthen the value proposition of 0x and, by extension, the token. But, this means the “2,” isn’t appropriate either, as we need to ensure an appropriate amount of compensation for a six-month, full-time (or part-time) commitment

As for the expenses, think of the actual topline number as the external dev fund. The total fund is 2M ZRX, but we’re suggesting to only employ ~165K at first as a way to signal an intent to be prudent and tactical with our approach. Put another way, we believe it would be irresponsible to ask for a larger amount without first conceptualizing and articulating a coherent, long-term strategy that has community backing. While we’re building this strategy, there’s plenty of ‘low-cost, high-impact’ projects we can go after with the 165K. That said, if we see a terrific opportunity within this window, we’re reserving the right to come back to the community for an additional ask. And, while we’re deploying this capital, we’re going to think about additional ways to earn interest on the rest, and treasury growth would be one of our top priorities.

Coming back to a few other comments re: compensation and expenses, @Nikita and I spent a lot of time thinking through the implications of keeping the six-month salary pegged to a set USD or ZRX amount. Originally, I was on the side of keeping this in USD, but changed my mind because I truly believe paying in ZRX would be the best long-term alignment of incentives. In a bull-market, it’s easy to imagine a situation where ZRX goes up 2-3x quickly. But, I’ve been in crypto long enough to know this could change on a dime, and we could find ourselves in a situation where the markets - or even just ZRX - drop precipitously. In this new paradigm we’re trying to build, referencing back to USD doesn’t help shift previous mental models, and at least some people being compensated aren’t US-based. Additionally, going this route enables us to know exactly what % of our treasury will be paid out within the next six months, allowing us to make better decisions. Anyone agreeing to get paid in ZRX certainly has good upside, but some of that is being compensated for additional, downside price risk.

Lastly, keep in mind this is only six-month commitment, and we plan to revisit the strategy with the community 4-5 months from now. If it’s not working, or the token fluctuates wildly, we can pivot. It’s important to attract and reward talent in an environment where there are potentially huge opportunity costs, both for individuals and projects. This strategy gives us the green light to go ‘all in,’ with the right person at the helm and incentives perfectly aligned.

Thank you @nikita for putting forward this proposal. I am excited to see what this community-run DAO can achieve given a common mission, clear vision, a pool of financial resources, and a transparent governance process that ultimately dictates how we allocate these communal resources. We are fortunate to have @nikita @SonofPegasus @0xSHA @JoaoCampos89 and @gabririgo stepping up to lead this first experiment in human coordination. I’m optimistic that we will learn a great deal from this first exercise.

After reflecting on the initial proposal I have some constructive feedback to offer that you will hopefully find helpful. Overall, I’m excited to support this committee.

The committee’s goals and deliverables are clearly articulated.

  • To actively drive value creation and capture for the 0x protocol.
  • …to efficiently and effectively allocate community treasury funds…
  • …we envision this initiative will turn into a sustainable source of meaningful, long-term value for the 0x ecosystem.

What I’d love to see is more explanation of the mission. What is the contribution that our community wants to make to the world through the existence of 0x DAO and the community treasury? Ultimately, this is the “why” that guides our decision making when we have tough judgement calls to make. The answer could be “make as much money as possible,” which would be similar to a traditional company’s fiduciary responsibility to maximize value for shareholders. Alternatively, value capture/growth could just be one consideration among many as we pursue a greater mission for 0x DAO that goes beyond financial outcomes.

I think aligning on the committee’s mission and the mission of 0x DAO will help guide decision making and increase alignment. The mission doesn’t have to be permanent either, it can evolve over time.

Separately, my gut instinct is that it probably makes sense to narrow the committee’s scope somewhat for this initial experiment so that it is easier to focus the committee’s limited resources and attention. Narrowing the scope would also make it easier to set clear goals and evaluate results. Some areas where I see opportunity to have immediate impact and get some fast wins:

  • Engaging with emerging developer communities, such as BSC, Polygon, Solana, etc.
  • Hosting, sponsoring, and/or advertising hackathons.
  • Assisting with dApps and new integrations, especially projects using order books.

Yes! As 0x protocol becomes available on new blockchains there is a huge opportunity to raise awareness around 0x protocol and 0x API within new dev ecosystems like BSC, Polygon, etc. Very few developers are familiar with 0x in the BSC community.

  • Improving the user experience for staking.

Yes! At 0x Labs, Ben Burns and Ben Lyaunzon are focused on making improvements to ZRX Portal and I’m sure they would appreciate feedback and engagement here.

  • Strengthening our community through outreach and rewards
  • Ramping up marketing
  • Conceptualizing and executing social media campaigns

Helping drive adoption and awareness of 0x protocol on other blockchains would also go a long way towards growing our community and increased mindshare.

Regarding compensation, my gut instinct is that it probably makes sense to target a rate of 150,000 USDC per year for a full-time contributor and that person can choose to receive their pay as USDC or ZRX or a mix that is agreed upon up front. My assumption here is that someone that has proven themselves to the community by delivering results would be able to ask to adjust compensation upward over time.

4 Likes

Agree with the message from @_wwarren.
My concerns are related to the fact that despite the original proposed compensation is blatantly unfair, multiple feedbacks in this direction were neglected as irrelevant or simply wrong by definition by the creators of the proposal.
Considering that unfortunately the community engagement has never been very high, I believe that a more humble approach, showing more interest for the community and trying to involve the community more, would be necessary.
Starting with a low profile and try to demonstrate that the committee is able to deliver real value and create a positive and bi-directional relation with the community that creates trust would be the way to go in my opinion.
On the other hand proposing from the beginning a compensation such a compensation structure (250K at current rate, half a million if the price doubles in the current bull market) for an anonymous person which doesn’t show up in the governance calls and which the community knows nothing about other than he is a good community manager and is fluent in corporate speech, seems to me an outrageous and irrespectuful proposal, which makes me wonder if they deserve our trust and what the real intentions are.
Regarding “rewarding talent” I believe we should make it clear who decides how much talent a person has and how much that should be rewarded. I see a problem if the persons that make these decisions/evaluations are the same as the persons that are rewarded. This doesn’t seem to go in the direction of involving the community. As mentioned previosuly my suggested approach would be first to try this model and see if it works and is able to deliver real value and engage the community and then the compensation can be discussed again.

I don’t want to speak for @nikita here, but I’m not sure I understand the negativity / aggressiveness in this post. If you disagree or wish to provide feedback, that’s fine. That’s what we are looking for. Nikita and I have read every word of this thread multiple times and are weighing all feedback.

As for comp, Will Warren is suggesting pegging to the lead to 150K, which at current prices would be around ~75 ZRX an hour. We are asking for 73. If the price dips, it could be over a 100 ZRX/hour easily. We’re making a bet that our efforts would lead to a price increase, and we’d be incentivized to do everything in our power to deliver enough new value and engagement to the protocol that price would rise. In that sense, our incentives would be aligned with tokenholders.

Remember, this is an hourly rate, not a “full comp package,” so 150K a year = typically $100 or $110K annual salary + benefits. We think the salary range should be adjusted upwards for what we’re trying to do (Probably in the 130-140K annual range, or ~180K when considering more of a full comp package). Additionally, this range is on par with the salary structure for most other DAOs, far from “outrageous.”

Last, I’m going to defend Nikita a bit here. They have been extremely selfless (and humble) in giving hundreds of hours to the community over the last two years, many times being the only one hanging around in the Discord to answer questions or raise flags to the 0x team. IMO, to imply that they this approach doesn’t show interest or willingness to involve the community just isn’t accurate…we literally posted this for community comment and feedback. Just because they wish to remain anonymous doesn’t mean they don’t listen to calls and provide tremendous value to the 0x team.

This is far from the most aggressive comp plan, especially considering there’s no additional vesting comp. For instance, while it’s not apples to apples, the SNX “council” has nine people making 1,000 SNX a month, which would be 114K for a six-month rate.
At the end of the day, no one is going to work full time for free or on a reduced salary, and you need to pay the appropriate rate for good talent. I personally believe it’s worth the six month commitment to see how it goes. It’s OK if anyone disagrees, I just ask that you do so respectfully.

4 Likes

I don’t see a good end to this “should we compensate anons” discussion TBH, looking at other project in the space, there are several anon contributors and leaders and I think it’s a mistake to focus on that point

So basically suggested approach here is that DAO members work first and then get compensated regarding the results.

I think is a good approach when dealing with part time contributors, however there is a clear limitation to that, it does not attract talents in a highly competitive market as other groups/projects are more aggressive in regards to hiring incentives. It is also very ineffective in bringing full time contributors. So usually what happens is that you have a lot of people coming and leaving as they loose interest or commitment due to other opportunities/priorities which lead to loss of efforts, lack of focus and all kind of frustration related to that, The DAO should give priority to attracting talents during the bootstrap phase to intentionally “bootstrap” things as quickly as possible. Then of course with time things will naturally get more structured

Not sure my opinion matter in the discussion as I may be the least experienced in this forum/discussion. But I think @nikita is the most qualified person to lead that effort. if compensation is an issue, maybe we can rework the proposal taking all the suggested points, but it is taking the risk of loosing some key contributors. To me at the end the 0x DAO success/failure will certainly have impact on ZRX price, that is why compensating in ZRX makes the most sense, trying to speculate on that from the beginning is to me a waste of time/effort, especially when it is about known community contributors that have proved their dedication during a significant time period

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sorry, didn’t want to sound too negative.
Your math seems sloppy though.
Given the current price (considering it has lost 30% in a week) of 1.67$ → 1.67 * 75 * 40 * 52 = 260.520$
Also converting from USD to USDC or ZRX at the payout moment is different from fixing the price based on the last 180 days.

We’re not asking for a $1.67 rate. The price is fluctuating so rapidly, we’re proposing using a 180 day average. Price has been going up the last few months, but it could easily drop below a dollar. Regardless, since it’s impossible to know, it’s impossible to make prudent long-term decisions pegging to USD.

73 ZRX/hour for a six-month lead plus a part time supporting cast is 5.1% of the total treasury. We should center the debate as to whether or not that’s too much or if that’s a fair amount of treasury to spend on comp, and what are the tradeoffs for paying less (potentially a lesser caliber of person / people) or more (more resources, but more pressure to add value quickly). Remember, we had a grand total of one person raise their hand to do this full time and a grand total or two people to raise their hands to be core contributors.

@nikita has gone above and beyond to contribute to our community for years now and has never asked for anything in return. Nikita has also always remained respectful and gracious in interacting with members of the 0x Discord. In my opinion, Nikita is credible and we would be fortunate to have her lead this initiative. She has my strong support.

This proposal calls for a short 6-month experiment, the financial stakes are relatively low in the scheme of things, and we have an opportunity to empower some of our most enthusiastic community members. Regardless of the outcome of this 6-month experiment, we’ll learn a lot about how to run community treasury programs. The risk/reward is excellent IMO.

We currently don’t have a formal process for moving proposals along from initial submission to on-chain vote. It probably makes sense to have at least one intermediate step where the submitter can integrate feedback and the community can signal sentiment off-chain before it goes to the on-chain vote. Until we come together to formalize this process, I’d encourage @nikita and the proposed committee members to move this proposal to the next stage by integrating feedback you agree with, finding compromises where possible, and providing a 2nd (final?) draft.

I think we are getting close. I’m personally excited to support @nikita @SonofPegasus @0xSHA @JoaoCampos89 @gabririgo and applaud their effort to create the very first 0x DAO proposal.

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