Hello,

In the past month, I’ve been a part of the RnDAOs fellowship swarm, and have learned and grew with the mentors and my peers. I joined RnDAO with I believe a good, but at the same time incredibly vague idea. I want to share the journey of that.

A bit of history

I’ve been unhappy with the way money and compensation work pretty much all my life. I grew up in Bulgaria where the idea of a middle class doesn’t exist. Moreover, I’ve believe that especially in places like the balkans, whether you’ll do what you want and is interesting to you, is absolute luck, in the sense that with the vast majority of the professions you may be interested in, you can’t make enough money to live. This was incredibly frustrating to me when I was in high school, getting ready to go to the university. I happen to be one of the lucky ones - loved math in primary school, went to math high school and after - computer science. My sister on the other hand is an artist, and she for obvious reasons no longer lives in Bulgaria, as there’s nothing there for her. So many people go to university to study computer science or economics for the wrong reasons - because that’s how you make money.

All this lead me to…

looking for solutions, exploring alternative structures, such as DAOs and cooperatives and brought me to web3 in 2020. When I learned about DAOs, I thought all this existential problems I have are now solved - happens not to be the case.

The idea of resource sharing and profit distribution is very close to my heart, because of this frustration for unrealised potential that we have, only because of the economical and compensation system.

During an event with Mycelium Hub last summer, an idea for a resource sharing network was born. The idea was to compensate all contributors to a course or project fairly, as well as incentivizing them to fund other projects in the network in order to insure truly circular economy.

Then..

I got into RnDAO fellowship with the idea of researching profit distribution and how to make that piece work. The challenge with that was that the problem was incredibly vague. Here’s my very first problem statement (don’t judge):

I am a motivated person who wants to start a new project
I am trying to fund the project and have a team compensated fairly
But I can’t compensate my team fairly
Because I don’t have enough funds and the means of measuring value
Which makes me feel frustrated and blocked.

With the help of Daniel and Lino, we narrowed down the problem to Compensation Models in Decentralized Organizations. This allowed us to zoom in on the node level (project) within the Profit Sharing Network and make it functional before expanding further.

Daniel shared his previous research on compensation models for RnDAO and offered me the opportunity to build upon it. This meant that I could receive direct feedback from active users within RnDAO. I decided to take advantage of the opportunity to work with Daniel and build on his experience.

So I started talking to people..

I must admit, user testing was something completely new to me. I had never conducted user interviews before. Nevertheless, I delved into two main categories of user research:

1. People with the problem: I tapped into my personal network to find relevant individuals for interviews. I focused on founders of projects in the early stages, with limited funding. Thanks to my active involvement in a lot of early stage projects over the past six months, I had the privilege of knowing many of these individuals. I talked to these projects:

   1. SoilDAO

   2. Thousand Faces

   3. Samudai.xyz

   4. Myosin.xyz

   And asked them these questions:

   1. How do you reward contributors currently?

   2. How do you come up with equity allocation/distribution?

   3. Do you notice having different types of contributors, wanting different type of reward?

   4. Do you use peer to peer assessment? Why?

2. Current users of the compensation model within RnDAO: This group comprised individuals who were already utilizing the compensation model. Conducting interviews with them was surprisingly easy, as they were open to discussing their experiences and understood the purpose behind the calls.

I also talked to I’d say 3 different types of users from 3 different projects - RnDAO, TogetherCrew and Harmonica. I talked to contirbutors, founder who are currently onboarding/integrating the model and founders who already use it for a while.

And asked them about:

• Onboarding

• Different types of contributors they’ve noticed, with different reward mechanisms

• P2P assessment

• Current pain using the model

Here’s what I learned

• People expressed concerns about the objectivity of peer-to-peer assessments. They believed that perceived contribution often differs significantly from actual contribution. It’s quite human not wanting to offend our peers and praise them, even if the assessment is anonymous. There’s a mix also between who I like and who deserves my high valuation. Generally peer-to-peer assessment seems to give good results in an organization with very solid culture.

• Onboarding individuals who are new to web3 and DAOs can be challenging without the facilitation of proposals. Asking newcomers to put a proposal with an offer on work and compensation for this work is uncommon outside DAOs and web3. If we want to include more newcomers, we need to facilitate this process better. We need an interface between the person proposing to contribute and the DAO.

• Regular compensation with proposals can be a really vulnerable process. If you need a change in your income, because you change countries, had a kid or inflation has hit your country, you need to go to your community and relatively transparently explain your situation.

• Founders don’t have time to deal with admin work around a compensation system. It needs to be easy to set up, require minimum effort on a monthly basis, and not bring confusion in the team.

And after all this, I did some analysis and work.

And here is my revised problem statement

I am a founder
I am trying to form a strong team to build our project
But I can’t reward the contributors fairly
Because I can’t measure value brought
Which makes me feel blocked.

Feels way more tangible and real. Most importantly it’s a problem that you can work on, it’s concrete enough to look for solutions, and try them with people.

As a conclusion

I can say that I find myself in a place of excitement and confidence in exploring further this problem and finding solutions for it. With the help of RnDAO and my fellows, I’m positive this research will get even more insightful. Thank you for reading, and see you soon with the next update.