Allocating token rewards to your DAO’s contributors can be a complex and time-consuming effort, especially when your organization has had a large number of contributors in the past. And the most minimalistic setup we have found so far is the combination of Armitage and Drips.

Retroactive Rewards

With open-source projects, it’s not uncommon to have maintainers working for free throughout the entire existence of their project. However, with new initiatives like Drips there is an increasing effort going towards funding digital public goods.

In some cases, a developer might have been working on an open-source library that over time has grown more and more popular, consequently being added as a dependency in many other software projects. And when this happens, it makes sense that the contributors to such projects get retroactively rewarded for the value that they put effort into on creating in the past.

At our open-source organization we have 63 members as of today, and several of these members have contributed to one or more of our code repositories:

So we were looking for a smooth way to summarize all past contributions, and then retroactively rewarding our contributors. All this without getting bogged down in the details of administrative overhead.

Step 1: Summarize Past Contributions

First, we needed an easy way to summarize each person’s past contributions for every GitHub repository. And for this we found Armitage to be really useful, because all we needed to do was adding each GitHub repository to their app. Then, after a few minutes of Armitage running a code analysis, we had a table of past contributors and the impact percentage per person:

Step 2: Distribute Token Allocations

Next step would be to allocate the above percentages in the form of the DAO’s governance tokens. As explained in the $ELIMU tokenomics document, we currently set aside 1,935,000 tokens per month for rewarding engineers, content creators, and distributors:

For the distribution of these tokens, we created a Drip List. And once per quarter, a stream is initiated from the Ξlimu DAO to the Drip List:

At the end of each month, the organization’s contributors can then connect their Ethereum account to the Drips app and collect their allocated funds for every GitHub repository that they have contributed to:

Reduced Administrative Burden

Combining Armitage and Drips has helped us keep the administrative burden of token reward calculation and distribution at an absolute minimum. We only need to setup a stream of tokens at the beginning of each quarter. And after that, each contributor can claim their rewards whenever they want.

The only remaining administrative task at this point is adding new contributors to the existing Drip Lists, which is something that needs to be handled manually by a DAO admin. For this, the flow is as follows:

1. After contributing code changes, a new contributor opens a pull request for adding themselves to a FUNDING_SPLITS.csv file in the GitHub repo.

2. Then, at the end of each month, a DAO admin goes through each GitHub repo and imports the updated list of funding splits into the repo’s Drip List.

Drip List Funding Splits 💦

Every active GitHub repository under our GitHub organization has a FUNDING_SPLITS.csv file, and we added links to these files in a high-level overview document:

The Ξlimu DAO is the owner of the top-level Drip List. This means that token holders can propose and vote on adjusting the funding splits if they wish to do so in the future. For now, we are splitting 1/3 of the token allocation for each of the three categories of work:

Benefits

Transparency

We see several benefits with using Armitage and Drips for allocating and distributing Ethereum tokens. First of all, since making the flow of funds public and visual at every level of the organization, it enables full transparency. Someone who wishes to support the organization can look at all the levels of the Drip List, and see exactly where the funds are flowing. All the way down to individual contributors working on specific projects (GitHub repos).

Imagine a larger organization like UNICEF or WFP opening up their flow of funds with a tool like Drips. We think that would incentivize donors to give more, if they could gain more insight into how their donations are actually spent.

Fairness

Another benefit of this setup is that we get a more fair allocation of tokens to our organization’s contributors. Thanks to Armitage, we can easily extract a number representing each person’s impact on a GitHub repository. So instead of having a person subjectively decide a contributor’s token allocation, it’s handled in an objective way by the Armitage app and simply copied from there into the Drip List.

Conclusion

For those of us who are open to using decentralized technologies for managing the financial layer of our open-source organizations, Drips is a great way to split funds between contributors. And it comes with a lot of flexibility as well; In our case, we mainly use it for our internal monthly token allocation. However, the same setup can also be used for external fundraising, since supporters get the opportunity to have full transparency when deciding whether or not to donate Ethereum tokens to an organization.

It’s also a great way of giving back to the creators of the open-source dependencies that we used when building our own software. At the end of the day, we are standing on the shoulders of the open-source contributors before us.

About elimu.ai*
The mission of elimu.ai is to build innovative learning software that empowers out-of-school children to teach themselves basic reading📖, writing✍🏽 and math🔢. You can read more at https://github.com/elimu-ai/wiki#readme.*