TLDR: Multisight is conducting a community survey on multisig signer rewards at multisight.app/research. Don’t stand on the sidelines, take 5 minutes to share your experience, and help build a much-needed educational foundation on this topic.
DAOs and other collaborative projects frequently utilize multisignature wallets to manage shared assets. Aiming for decentralization and safety, the adoption of multiple signers is a good practice to enhance decentralization by distributing responsibility and minimizing the risk of a single point of failure. Acknowledging the time and effort invested through the signer role, it is reasonable to also set up a signer incentive system.
However, it is not always clear how to fairly reward individual signers. Different setups present various risks, which often might not be obvious at the first sight. To highlight the intricacies involved, let’s take a look at two examples:
Rewarding all members automatically
Providing equal rewards to all multisig members (e.g. periodically each month) may seem equitable initially. However, this approach opens up an opportunity for signers to become inactive while still passively collecting rewards, leading to unfair compensation of active signers. Over time, this can result in a majority of signers becoming inactive, hampering transaction processing and compromising the setup’s efficiency.
Rewarding only the transaction signers
Limiting rewards solely to those signing transactions fosters a competitive atmosphere where speed takes precedence over careful consideration. This may result in signers neglecting transaction details to secure personal rewards, ultimately undermining the enhanced security promised by multisig setups.
A couple of recent instances underline the importance of multisig signer incentives:
While being only partially related to a poor multisig signer rewards design, these examples still amplify the main challenge - a lack of easily accessible resources on the topic:
“There isn’t a lot of transparency around multisig compensation in various DAOs. This is not because people are hiding the information, but rather it’s simply because this information often isn’t publicly displayed in obvious places” - Amplice from Gearbox
To address this knowledge gap, Multisight is conducting research on multisig signer reward schemes. The objective is to gather insights and experience from the web3 community and create an educational foundation for all existing and upcoming projects.
By dedicating 5 minutes to complete the survey at multisight.app/research, you become an integral part of building this knowledgebase, helping others responsibly incentivize their multisig signers and secure their assets. Don’t stand on the sidelines, contribute to making the web3 space better!
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