Thanks for the sharp feedback!
@yorgos wrote a great reply, but figured I’d give my 2 cents on some of your points as well
They’re organizied in descending order of agreement (i.e. I agree more at top, less so at the bottom).
i understand we have left a lot of variables open and appreciate the extra effort in trying to structure this, but the anchoring bias of these sets of assumptions i view as dangerous
I think the most dangerous point is that we the committee will also be the ones voting on our own compensation. There is a clear conflict of interest.
In the short-term, 2 things I think will help control for this:
- Everyone is getting paid in RAD (not USDC), so the hope is that we will keep each other honest for the benefit of the equity we are being paid (i.e. we have skin in the game)
- Committee members will need to open a PR that logs their time worked. This entire process will be 100% public.
In the long-term, I’ve posted a few times that ideally we move compensation to an entirely separate governing body; something like a “Compensation Committee” that thinks deeply about how best to manage compensation.
In leu of that Compensation Committee, the overall structure outlined above is the best possible option, in my opinion. If you have better (and specific) ideas, I’m all ears
I’ll start with the equation above:
committee_members = 6 monthly_hours = 50 grants_program_lengths_in_months = 6 hourly_compensation_usd = 150
- We have 6 voting seats. No debate there.
- 50 monthly hours. There is debate here.
- We have a 6 month program. No debate here.
- $150 per hour. There is debate here.
as previously mentioned assumptions around 50 hours month for grant committee work sounds absurd.
Main theme here is:
This number is the absolute maximum that I am expecting some people to work. This number was not pulled out of thin air. It came from talking with people who have worked in grants programs and said that they have sometimes worked between 10-15 hours per week reviewing work.
I am not trying to fund this program with the “lowest common denominator” in mind. I am trying to fund it in a way that allow people to work more and trust that they can be paid for doing more work. This is sort of the point @yorgos made about the grants program possibly going viral.
At my current job, I am on a team of about 6 people. When we are hiring, we rely on an HR department to do all the initial screening of candidates. This is probably 30-45 minutes of work per candidate (reading through their application, GitHub account, past projects, etc.). Once a candidate makes it past there, we might collectively spend 10 hours per candidate to put them through interviews, review candidate work, and collect feedback notes. Again, to @yorgos’ point: reviewing work should not be a rubber stamp. It’s intellectual work that takes time.
At the end of the day, any unused funds will be returned to the Treasury. We will come away with learnings (e.g. perhaps we really only work 3-5 hours a week as you mentioned), but we will have managed downside risks at the same time.
i believe the rate of $150 per hour is too high and has not been appropriately explained. based on the requirements articulated there is no clear reason why an undergraduate comp sci major would be unwilling to effectively serve on the committee for a fraction of that rate
@yorgos hit the nail on the head.
But I will follow up by saying: we are not trying to hire the type of people who are ok with $50 per hour. There might very well be a new graduate who is a serial entrepreneur and who could handle the complexity of a product like Radicle. But such a person - new graduate or not - is worth more than $50 per hour. They can go work at a FAANG company for at least $100 per hour, when you consider base salary, equity, benefits.
Personally, I have another job as a data scientist and my time is worth a lot more than $100 per hour. I can’t speak for the other committee members, but if you click on the links provided for each committee member, I would argue that their time is worth even more than mine is.
We want to attract committee members who can provide value that goes beyond being an operational rubber stamp for grants. Please see the examples I mentioned, which many of our committee members are experts on.
Also, everything @yorgos said about this being “consulting” work is very salient.
we are putting aside $511K worth of RAD for the management of $1M of grant capital for 6 months does not pass a common sense smell test.
I will start with this equation:
RAD to Transfer = $270,000 / (AVG Price over 6 months - STD of price) RAD to Transfer = $270,000 / ($10.80 - $4.68) RAD to Transfer = $270,000 / $6.12 RAD to Transfer = 44,108
- $270,000 for total compensation. If you agree with the points above, there is no debate on this number.
- $10.80 average RAD:USD price over last 6 months. No debate here. It is a mathematical fact.
- $4.68 standard deviation of RAD:USD price over last 6 months. No debate here. It is a mathematical fact.
We have to control for RAD:USDC price volatility. Fingers crossed that it doesn’t happen, but how would you pay committee members if the price of RAD dropped 80%? In the last 6 months, this has happened. It went from around $25 to $5. This is a very real risk, which must be controlled for until the price is more stable.
Your assessment that we are allocating $511K for compensation is missing the point. We are estimating $270,000, but also have to manage the risk of a downturn in the price of RAD.
This sort of equity compensation + risk management is something that would ideally be handled by a Compensation Committee.
I understand this is perhaps the “dangerous” part you are referring to. There is a danger that RAD’s price remains stable and we collectively find a way to raid the coffers to take all $511K that is there. Again, please see my notes above on short-term controls against this.
But I’d also add, I have voted “yes” on this proposal. I am
bordumb.eth there. You can see how much RAD I already have and I am also staking my reputation on this risk management. I am expecting that I’d be ousted if these funds are mismanaged.
I think there is a lot less room for debate on the risk management side (my last point just above).
I also don’t see much room for debate on the hourly rate.
But perhaps there is room for debate around monthly hours.
@niloconthecob keeping in mind all the points on risk management, do you think we should also risk not being able to pay committee members what they are worth?
For example, imagine the following scenario.
- We allocate $100,000 of RAD at today’s price ~$12, so ~8,300 RAD, for committee compensation
- Committee members are paid $150 USD:RAD
- Committee members work 2 hours per week, or 8 monthly. This is using your assumption of less hours.
- RAD:USD price drops back to $4, so we must pay 37.5 RAD per hour ($150 hourly rate / $4 RAD:USD)
- This amounts to 288 total hours worked over 6 months (6 voting seats * 6 months * 8 hours per month)
- We would need 10,800 RAD (288 hours * 37.5 RAD per hour). We would be unable to pay committee members by over 2,000 RAD!
The risk of volatility in price is very real and cannot be understated. If we were the Ethereum Foundation paying out in ETH (which has a much more stable price), I might put less weight on controlling for volatility.
I hope that thought experiment helps you piece together some of the thinking here. But let me know if you still find disagreement with it and maybe some ideas on how you might better control for these variables