[RRC-XX] Delegate Incentive Program

[jengajojo]

Authors: @jengajojo
Reviewers: @WinVerse, @Sohobiit, @coffee-crusher, @jarisjames, @dzonson.eth

Abstract

A six-month delegate incentive program aimed at incentivizing delegate participation and retention, and suggests a retroactive compensation model based on performance and minimum standards to be maintained by participating delegates.

Motivation

Cohort 1 of the delegate launchpad saw 33% delegate retention to the next cohort and saw 1 new initiative come out of the cohort. We wish to outperform these results in the current cohort and hold delegates to a higher standard. Highly engaged delegates with a true sense of ownership are imperative for decentralizing the RARI DAO and allowing the community to increase its participation in the decision-making at the DAO.

Rationale

Historically voter apathy has been an issue faced by many who have tried to venture in this direction and this usually stems from complexity in voting systems, lack of context or skills, and a general disconnect with the ongoing issues. While many DAOs have tried to counteract this with delegated voting systems, most token holders lack the time and means to engage in governance.

Delegates on the other hand aren’t just hobbyists, they are often people with deep knowledge and passion towards the DAOs that they are active in. Delegates can be individuals or teams that invest resources in deep research, data analysis, technical understanding, voting, and effective communication to execute their mandate as delegates effectively. Without this dedication, these critical tasks tend to be rushed or inadequately completed, which can have far-reaching consequences. In their post on ‘Why Pay delegates’, flipsidecrypto argues that compensation attracts talent which is essential for protocol security, and compensating experts ensures that malicious proposals do not lead the DAO and the underlying protocol in the wrong direction.

Key Terms

RARI Ecosystem - applications utilizing the Rarible Protocol

$RARI - ERC 20 token, used in the RARI DAO governance

Delegate - Someone who votes/participates in governance on behalf of themselves or their delegators

Specification

1. Eligibility:

To be eligible, a delegate must:

• Delegates must have =/> 2k veRARI to be eligible
• Regularly attend proposal review calls
• Have a verified governance identity

2. Framework:

The incentive system consists of two tiers. Delegates can choose to participate in one or both tiers.

1. Incentivizing Minimum Standards

Delegates will be compensated for ensuring minimum standards which include:

• Maintaining an 80% onchain voting rate
• Commenting on proposals
• Communicating voting rationale

2. Incentivizing Consensus

Governance moves forward in a DAO by coming to consensus on next steps and making decisions onchain. Thus, a delegate or group of delegates who lead initiatives that generate onchain decisions shall be compensated for offering this service to the DAO.

3. Incentive Framework

• 15,000 RARI will be equally distributed between all delegates who fulfill minimum standards at the end of the cohort.
• All delegates who are eligible for the program shall be invited to participate in a coordinape round at the end of the cohort with a pool size of 5000 RARI.
• Based on the proposal scope and implementation, each proposer can choose to include compensation for their proposal according to the following guidelines:

$RARI	Implementation Squad	Technical implementation
3000	one	No
6000	one	Yes
6000	several	No
9000	several	Yes

*compensation for the first two items will be done retroactively at the end of the cohort

Steps to implement

• Gather feedback
• Transfer funds to a new escrow address
• Review performance and distribute rewards at the end of the cohort
• Return unused funds to the treasury

Timeline

The incentive program shall run for the duration of 6 months.

Budget

23,000 RARI, which includes 20,000 RARI to be transferred to an escrow address as well as 3000 RARI to be transferred to the proposer

[bitblondy]

Thanks for the proposal. I agree with your elaboration that compensation attracts talent, the design of such programs, however, is a difficult task (ultimately, you want intrisically motivated people).

That definitely should be some kind of retroactive mechanism, so based on activity that has already happened. Your rules for that are straightforward, but could be more specific.

For the current size of the delegate program (I think 15 delegates?), the allocation seems to much for me. Maybe starting with a small round and see, if the incentivization has an effect.

Is it possible to lock the distributed tokens? Could be mandatory to incentivize long-term activity.

@jengajojo

as well as 3000 RARI to be transferred to the proposer

Is this for the proposal? Don’t see the neccesity to reimburse the proposer.

[jengajojo]

Thanks for the feedback @bitblondy

• Do you have any specific suggestions for the incentives?

As a general question to the community, is there a sustainable way to fund governance participation without having incentives?

[bitblondy]

Hmm, besides financial incentives you can always work with reputation incentives, e.g. an NFT for delegates or something like that.

But maybe that’s something to discuss better in a group.

[jengajojo]

That’s a good question. Are there any examples of people doing professional work for a NFT which has yet to find a bid?

[bitblondy]

It could at least be a token of appreciation, or an addition to financial incentives (if we decide to issue any kind of incentive)

[AlexQ]

Hi there!

1. If you calculate 20,000 RARI for 15 delegates for 6 months, then the delegates will receive $888 per month at a price of $4 per RARI token.
   I wouldn’t say that this is a large sum for activity. What’s good about this kind of incentive is that it attracts delegates from other DAOs who will be willing to buy the RARI token for the opportunity to receive a reward, and in return they will bring their ideas and experience.
2. Due to the fact that there are only a couple of discussions on the forum per month, this amount is already becoming adequate, I think.
3. It seems to me that it is very important to discuss all the details on the forum, since here it is convenient to see the development of the discussion for each proposal. And new delegates will be able to quickly immerse themselves in the current agenda.

[bitblondy]

Delegates discussing their own compensation is kind of difficult in general…

As stated before, I agree that incentives attract talent (besides the fact that the delegate program is a closed thing, as far as I understand).

The sum just seems much, I mean that’s almost as much tokens as the delegates got delegated
I spent maybe an hour a week in the forum.

[Firefly808]

I’ve got a couple of concerns about the compensation model proposed here. Specifically, it seems we’re setting up a situation where we get compensated twice for similar efforts. We already receive payment for participating in a working group and successfully passing a proposal. This new incentive feels like it’s an additional layer of compensation on top of what is already in place for the same set of activities.

Additionally, the proposer’s ask of 3,000 RARI, which accounts for 13.04% of our total 23,000 RARI budget, seems quite high for the scope of this proposal. It’s worth discussing whether this allocation is justified.

Section 3 point 3: what is that table trying to say?

[bitblondy]

In general, the working group and delegate incentives are intended to be sepearte things I assume, so delegates don’t have to to participate in working groups and vice versa.

But I agree, that there probably will be overlapping. Is it an option, that delegates will be rewarded with their delegated tokens? Could be an incentive to further engage in the governance.

[jengajojo]

Hey @forexus @Firefly808 @dzonson.eth Thank you for your comments on the Empower active delegates post. We can continue discussing delegate incentives here or start a separate thread.

[dzonson.eth]

Thanks for bringing it up Jenga!

In regards to empowering active delegates my thought process is that we have really quality individuals who participated in Cohort II program and since the program is ending soon and the participants will lose their voting power, I believe that discussing this topic is really important right now since it is time sensitive.

I fully agree with the idea behind this draft which suggest that the most active members should be rewarded with $RARI (way for delegates to be permanently part of DAO instead of depending on programs and temporary veRari allocation).

Now that is the part I assume many would agree with. Next and crucial question is how to we determine eligibility? Should the team decide? Should we track on chain data like participation in governance, activity on forum etc?

Would really like to hear what do you guys think. In my opinion I don’t think it will be major issue since it’s pretty clear who’s been active past months in the DAO but yeah, we gotta articulate eligibility requirement somehow.