MoonDAO is on course to becoming the first DAO to send humans into outer space and the first of its kind in space research and exploration. It is a fast growing community of token holders, core contributors and space enthusiasts. Its mission, put simply, is to decentralize access to space by fostering  partnerships with space agencies, academic researchers, engineers etc.

In this article, its compensation and incentive system is explained with a view to answering the question of how it implements its payroll policies as a DAO.

Since founding in November of 2021, MoonDAO has been intentional about its compensation and incentive structure in a bid to ensure that its core contributors are adequately compensated for their time and efforts.  The need to make adequate compensation a cardinal principle  of its reward system  informed its decision to choose a  retroactive compensation plan over the allocation of pre-launch tokens and it was also the basis for its deployment of Coordinape for verification of contributors and the allocation of points.

Discovering Coordinape

First, what is Coordinape and why was it adopted by MoonDAO?

Coordinape is a dapp that is designed to enable DAOs to implement a payroll system on the basis of individual contribution to a DAO project and a web 3 tool that integrates seamlessly with crypto wallets.

MoonDAO finally resorted to using Coordinape after it weighed the pros and cons of other dapps that serve a similar purpose. Its choice of Coordinape was informed by its value proposition which aligns with the core values professed by it. Besides, Coordianpe’s ability to make the distribution of rewards flexible and transparent made it the preferred choice.

What problem does Coordinape solve?

DAOs often have to grapple with the question of how to pay contributors for their roles at the onset as it’s a complex situation to elect to doll out salaries without first creating work streams that justify such mode of payment. Nevertheless, there must be some form of reward for those who expend time and energy on a DAO project or it would be very unrealistic to incentivize people to take up roles and responsibilities in a DAO.

Moreover, there is also the question of how transparent and corruption-free the system of reward and compensation could be when a percentage of the community’s treasury is salted away for the purpose of paying for the amount of effort that is poured into getting a DAO off the ground or pursuing its goals.

Using Coordinape, however,  has proven to be the best fix for the problem of how to implement a payment regime that is based on the ability of one contributor to verify or legitimize the claim of another in a distributed or recurring pattern. It also serves as a proof of how to decentralize the mode of payment so that no individual is able to control or influence how the distribution is done.

MoonDAO’s Retroactive Governance Token Distribution

MoonDAO’s first compensation was retroactive in that it dated back to the 24th of November which was the official date for the commencement of its phase 1. Phase 1 is defined as the work involved in going from 0 to 1 with MoonDAO.  It saw the creation of the vision, goals, mission and values; the marketing of the project,  the deployment of  juicebox; the launching of the governance token.

Coordinape allows every contributor to receive a certain number of points through their wallet addresses. The key-point about the distribution pattern is to exercise some discretion over the allocation of points to other contributors who are selected by a team member or contributor.

The allocation is in Coordinape GIVE tokens which can as well represent the number of points received. For example, X is allocated 200 points to be shared among the 20 contributors/team members he selected from the database. If X decides to doll out 10 points to them, each will receive 10 GIVE token from X as points earned.

A more detailed explanation using Alesha as case study will look like this:

• Alesha receives 50 GIVE tokens from the community for her contributions.

• Once the allocation period ends, her GIVE tokens will be automatically converted to GET tokens.

• The total allocation across the whole DAO is 1,000 GET tokens.

• The DAO’s seasonal budget is 25,000 DAI.

• Alesha’s 50 GET Tokens are 5% of the available 1,000 GET tokens, so she is sent 5% of the DAO’s total budget (5% of 25,000 DAI = 1,250 DAI.)

At the end of the voting period, the DAO sends Alesha 1,250 USDC for her contributions during phase 1 provided that no condition like vesting applies to the allocation.

The Problem With Using Coordinape

Coordinape is an excellent DAO tool based on its design and specification. However, MoonDAO’s first token allocation, which is more of an acid test, probes deeper into how the bar of equitable distribution of tokens can be raised to address the problem of underpayment or the lack of commensurate pay in the future. Since coordinape allows every user to select a team worthy of compensation  from the available database, there is a high tendency to leave out contributors who do not share the same work stream with others.

Critics have recently explained how token allocation on coordinape can lead to popularity contests whereby the amounts of tokens or points earned by an individual or a group of people relate to their  fame or popularity rating in the DAO. The situation puts lesser known contributors at the risk of underpayment and may significantly affect the rating or popularity of Coordinape among DAO users.

MoonDAO’s strategies for improvement

As it currently stands, MoonDAO’s rating of Coordinape lies between 5 and 6 on a scale of 1-10. But there is a general consensus in favour of scaling up the process of allocating incentives to deserving contributors and providing. The first step it has taken in optimizing the equitable allocation of tokens on Coordinape and reducing the risk of underpayment is creating multiple streams of incentives which include bounties, grants, salaries, reimbursements etc.

Moreover, work streams in MoonDAO are now well-structured and organised, and the levels of engagements in various streams have significantly improved since its policy of progressive decentralization began to gain traction. MoonDAO is committed over the long term to increasing the visibility of its contributors by incentivizing them to create proposals and build their own team. Consequently, this is expected to make MoonDAO more inclusive and decentralized in the future when utilizing Coordinape will include a check on the risk of paying contributors less than they deserve.

(Author: OlaPhsix; Editor-in-chief: CarolW)