The third episode of our “Culture and Incentivization’’ mini-series featured a conversation between Ellie Rennie, a Professor and Future Fellow at RMIT University, and Coordinape’s Zach Anderson, moderated by SCRF’s Head of Operations, Eugene Leventhal.
- How do you compensate early-stage contributors?
- What kind of mechanisms can help teams find ways of compensating individuals that are more representative of their contributions?
- How to help people understand how to get paid and what the processes are for work?
- Reputation as a form of compensation
Takeaways from the discussion:
- Coordinape, SourceCred, and other organizations are developing tokenized compensation tooling for DAOs and other Web3 organizations.
- These tools create conversations about compensation, allowing an organization to better allocate resources and reward contributors.
- This enables experimentation with compensation models, such as guaranteed basic income and retroactive rewards, which can contribute to a culture of gratitude, psychological comfort and entrepreneurship.
“When you leave a traditional organization, all you’re left with are LinkedIn connections,” says Prof. Ellie Rennie. “There are very different cultural dynamics at play in a decentralized autonomous organization, such as how do you ensure people are compensated for their work and how do you break down the formalities that traditional workplaces impose?”
Rennie studies SourceCred, a Web3 company which describes itself as a tool for communities, typically DAOs, to measure and reward value creation. Zach Anderson is tackling a similar problem with Coordinape. “Coordinape is a system that decentralizes decisions about compensation,” he says, “allowing people to pay each other based on their perceived value.”
SourceCred and Coordinape use community voting and distributions of cryptocurrency tokens to allocate compensation. These allocations spark vigorous debate within communities and it’s these conversations which both Rennie and Anderson have observed create the most value for an organization.
“The conversations that come out of allocation are more valuable than the allocations themselves,” says Anderson. Over time, these community discussions tend to surface high-performers and find hidden reservoirs of value creation.
“In traditional companies there’s safety in obscurity,” says Rennie. “At SourceCred, there was security in transparency.” She wonders whether or not collective allocations can devolve into a popularity contest.
“We’ve seen all kinds of dynamics at play,” Anderson says. “There are people who give to everyone with the expectation that they’ll get more, there are people who post all day in the Discord about how much work they’re doing while other people are too busy to tout their work, but over time these dynamics get exposed.”
When they function well, communities using these tools develop a culture that is less about self-interest and an employee pitting themselves against a company than it is about shared interest and stewardship.
As communities grow larger, it can be difficult for everyone to understand what everyone else is doing. There are various strategies that groups can use to work around this: smaller allocation circles can allow teams to better understand one another within larger organizations, universal basic income can supplement allocations or rewards can be granted retroactively.
“These communities are very temporary,” Rennie says. “People are constantly moving on or even consciously stepping aside, but if someone creates a core piece of code and it’s suddenly getting a lot of use that person could still be recognized long after they’d left. This could also be a form of institutional memory.“
“To me it also brings up an equity lens,” Anderson says. “Historically men have taken all of the credit. That’s one of the hopes of Web3, that we can rethink these systems and hopefully dismantle larger patterns of oppression and patriarchy.”
To kick off a discussion in Smart Contract Research Forum: a question for the community – how do you think implementing complete pay transparency might change the dynamics of your workplace / favorite internet communities? Are there better methods of incentivizing participation you can think of?