DAOrayaki Reserach |Coordinape: Decentralized Payroll Management for DAOs

12 min readJun 25, 2021

DAOrayaki DAO Research Grant：

Fund Address: 0xCd7da526f5C943126fa9E6f63b7774fA89E88d71

Voting Result：DAO Committee /7

Grant Amount：200 USD

Category: DAOs, Contributors, Incentivize Participation, Manage Resources, Yearn Finance, Community tools, Community grants, Internal Salaries, Special Projects

Contributor：黑白BQ, DAOctor @Daorayaki

Chinese Version:https://daorayaki.org/coordinape-decentralized-payroll-management-for-daos/

Coordinape is a platform for DAOs to easily and fairly distribute resources to contributors. Community grants, internal salaries, and special projects can all be incentivized and rewarded by the community itself. Instead of cumbersome voting or black box committees, contributors themselves can quickly and transparently reward the value they see being created.

Overview

Decentralized payroll management for DAOs

DAO’s don’t have top down management. There is no HR department. There are no contracts and no salary negotiations. How do you properly incentivize and reward contributors?

When the yearn DAO first started, it adopted governance weighted salaries (I use the term loosely, since technically they are once off, once per month grants, if you don’t contribute the following month, no grant). Governance weighted salaries where simply proposals set up by community members, where they proposed that contributor X should receive Y payment. These require active management and need monthly DAO votes / approvals. This doesn’t scale well.

To address the scaling and overhead problems, the yearn team built Coordinape, these are my favorite kind of products since they originate out of a personal need, but can be generalized to help any other organizations / DAO’s struggling with a similar problem.

What is Coordinape, simply put anyone wishing to contribute to yearn (or their own DAO) can register (currently using github details), every epoch (for yearn 1 month), you can select the team members you have been working and interacting with, below, yearn contributors;

For example, my interactions below (members I marked as having interacted with this past epoch);

Now each member has a set amount of allocation points, and can allocate points to the contributors they have worked with based on what they think of their contributions.

So if we look at the current epoch contributions we see the following;

Each line is an allocation from one member to the next. This builds up a contributor graph that is weighted towards the members that have the most interactions and allocations.

Now simply, during the epoch, yearn earns Y amount in fees / contributions / rewards / etc, this accrues to the Coordinate contributor contract, at the end of the epoch contributors can claim their grant based on their contributions in the epoch.

Conclusion

Coordinape allows decentralized teams and DAO’s without top down management or HR to autonomously allocate and reward contributors with funds, all done via sybil resistant social graphs.

Founder Team

Andre Cronje

Andre Cronje is a South African software developer and cryptocurrency/DeFi (decentralized finance) entrepreneur who is best known as the founder of Yearn Finance.

Facu Ameal

Communications Manager of Yearn Finance. Argentinian entrepreneur. He has been in the crypto market for 3 years. Previusly run the leading BTC farm in Argentina. Now dedicated full time to DeFi and the Ethereum ecosystem.

Detailed introduction

I. Vision

The promise of DAOs is decentralized collaboration, where teams of people can solve hard problems together and share in the rewards of the work. As the revolutionary potential of DAOs becomes increasingly apparent, so do their challenges and limitations… especially by those operating within them. Coordinape aims to make the actual experience of people working in DAOS more dynamic, rewarding and fair.

Coordinape moves more decision making to the community. The simple premise is that if you ask everyone in the community who is doing good work, their collective answers will give a good sense of where the value is and who should be most rewarded. Over time, this also provides valuable insights for the DAO about what kinds of work is prioritized, what the community finds most valuable, and who are the key contributors in different areas. The shared visual display also enables everyone in the community to see who is working on what and find opportunities for collaboration or reduce duplication of effort.

The focus now is on gift circles for resource distribution, but features are being added continually so that budgeting, recruiting and onboarding, project prioritization, and investments can all be done on the platform.

How It Works

Coordinape is currently implemented as an off-chain alpha while we develop an on-chain version, using an EVM compatible L2 or side-chain.

Coordinape is built around Circles — groups of DAO participants that wish to distribute funds through a decentralized gifting process. Each Circle can define the rules of participation — it can grow its network permissionlessly, set parameters around certain elements of its game mechanics and toggle network visibility, either through centralized admin or internal governance.

Circles run in Epochs: periods of time in which its constituent body of contributors can send eachother GIVE tokens, which represent that Circle’s total budget allocation. We envision Epochs as monthly events, where contributors can consider eachother’s collaboration, mutual enablement and furthering of the DAO’s mission over that time period. Each member is allocated a fixed amount of GIVE (100 by default), and can send any number of these tokens to other Circle members freely during the Epoch. Members can also opt out if they recieve funding elsewhere, allowing them to send GIVE but not recieve it. GIVE has no value if it is not given to another Circle member — the process of gifting defines the per-member payout from the cirle’s budget.

When the Epoch ends, the GIVE each member has recieved can be exchanged for a pro rata amount of monthly treasury budget.

II. Building DAO Operations

DAOs have revolutionized our facility for coordinating decision-making via coin-voting, but the shortfalls of these broad consensus-finding mechanisms have become very apparent as we’ve put them to the test across hundreds of communities over the past year.

While DAOs are often used to manage growing protocol’s many operational decisions such as hiring and compensation, the average coin-holder often lacks the time or expertise to add useful input to a system and is most often either abstaining or rubber stamping initiatives based on their trust, or lack of trust, in the core team.

DAOs solve one half of the problems decentralized networks require, defining governance. Coordinape is a DO (decentralized operations) platform that aims to solve the other half: a structure to make operational decisions within a team of contributors. If a DAO is the decentralized version of a board of directors plus shareholders, a DO is the decentralized version of the executive team plus contributors themselves.

Roll-out

We are testing Coordinape in phases to understand the social dynamics. For the first phase of its development, Coordinape is being built to tackle a key pain-point for Yearn: community grants. We have tested our proof of concept compensation mechanic, the “gifting circle,” over several trial periods at Yearn, including dedicated circles for specific groups and processes. Now, we are opening the alpha version to select partners for their use.

Development

Coordinape is currently implemented off-chain, to allow rapid changes and iteration as we research the best applications of core ideas. Simultaneously, we are working on an on-chain version, to be implemented on a layer 2 EVM compatible side-chain as we launch our Beta offering.

III. Gift Circle

Coordinape’s core feature (central to the Alpha version) is the Gift Circle. The Gift Circle allows a group of DAO contributors to decentralize the payment process, identifying eachother’s value to the organization to create a compensation map.

This is done through a process of Gifting.

The Gift Circle

An organization can stand up any number of Gift Circles, adding members through a decentralized process. During a set period of time (the Epoch), the group can perform the Gifting process, as follows:

At the start of the epoch, each member of the Circle receives 100 non-divisible GIVE tokens Members allocated their GIVE tokens to other members over the course of the epoch to reward them for the value they bring to Yearn Members can adjust their allocations up until the end of the epoch They can add notes to their allocations if they wish At the end of the epoch, all allocated GIVE tokens become locked (now called GET tokens), and all unallocated GIVE tokens are burned Budget distribution is then formulated according to the percentage of total GET tokens that each member of the circles has received.

Example

Joe receives 75 GETs over the epoch from his colleagues,
Total GETs allocated during the epoch are 1500,
Total Contributor Budget is 50,000 USDC
Joe is sent 2,500 USDC (0.05 of Budget).

How To Use Coordinape

In this section, you will find an overview of how Coordinape’s web application is used.

Circle Selection

When first visiting the Coordinape website, you will need to connect your wallet. If you are not able to gain access, your Eth wallet likely has not been added to a Gift Circle. Contact your administrator if this is the case.

If you do have access to one or more circles, you will see it on the Circle Selection page:

Please note, you will have to connect your wallet when you access a circle for the first time.

Profile Page

The first time you use Coordinape, you will be asked to answer a couple of questions, which will help your colleagues at Yearn to determine how to GIVE to you.

The first one is a Profile Statement. This can be anything. It is public for anyone in the Circle to read, and can be used to detail the work you have done this month or clarify what you have been compensated for, and what you want to be compensated for in Coordinape.

The second question is if you will Opt In or Opt Out from receiving GIVE for this epoch.

If you Opt Out, you are signaling that you have other income streams at Yearn which are significant, and you should not be getting Contributor Grant allocations. It will be impossible for others to give to you.
If you Opt In, you will be able to receive grants. You may use the Profile Statement to detail why.

Either of these settings can be changed over the course of the Epoch, or for future Epochs, by accessing your profile on the Allocation Page to change them. If you change your status to Opt Out after receiving GIVE during an epoch, any GIVE you have accrued will go back to its senders.

Edit Team Page

Next, you will be prompted to use the Team Selection page. This page will allow you to maintain a smaller roster of contributors, whom you have worked with closely and want to reward.

On this page, you may select any number of contributors, sorting or searching to find those you have interacted with the most.

Contributors are listed with the current number of GIVE you have allocated, so you can see whom you’ve already included in your allocation.
If you remove a contributor from your list after allocating them GIVE, your GIVE will be returned to you (within the active Epoch).
After selecting your initial roster, you can return to the Edit Team page at any time, linked from the header menu, to edit your group.

Allocation Page

The Allocation Page allows you to reward the teammates you have selected, by sending them GIVE.

Here you can:

Browse contributor profiles.
Select whole numbers of GIVE to send to contributors.
Adjust these gifts over the course of the epoch.
View the balance of GIVE you have left.
View the balance of GIVE you have received so far.
Leave notes for contributors to thank them, whether or not you send them GIVE.
Find your own profile card to edit your:
Name,
Profile statement,
Avatar image,
Opt In / Opt Out choice.

Graph Page

Coordinape provides a real time Graph to show the network movement of GIVES among the group.

Click on an avatar to see an animated representation of the GIVE flowing to and from each member.
Bands around the member represent the total GIVE that member has received in the epoch.
You can also toggle to view prior epochs, using the Epoch link at upper right.

Graph Page

The History Page allows you to see the GIVES you have received, per member, in any prior epoch.

This will page will also display your received notes.

Who To Gift

The purpose of the gift circle is to reward all the ways value is brought to your DAO. Over the course of the epoch, each member should allocate their GIVE tokens to other members using whatever logic that makes sense to them with the goal of making sure valuable contributions are recognized and compensated as accurately as possible.

The goal is not to share money equally, give from obligation, or to pay people for spending time within the organization (unless you think that is valuable). The goal is to reward valuable contributions. If someone doesn’t get any GIVE tokens, that’s OK. Maybe they were busy that month? Or maybe they aren’t bringing value. There is nothing wrong with that.

Use your own judgment in allocating GIVEs. In general, give them when you have first-hand experience of people creating value. If you are working with someone on a yearn project and you think they did a good job, allocate some GIVEs.

Try not to allocate GIVEs based on who is “supposed” to get them, or based on hype. Give them where you see value happen. Give them to people that help you.

Don’t worry too much about getting the numbers right, go with your heart.

IV. New Feature: Re-Gifting

The latest version of Coordinape includes a new concept: Re-Gifting. This feature will allow contributors to decide what percentage of their GIVE they would like to keep or burn. Re-gifting lets people distribute their recieved GIVE in a more flexible way, and removes confusion around opt-in / opt-out decisions.

We have built this as a proof of concept, with simple choices, and encourage those that find it useful to try it out.

** Please note that Re-Gifting has replaced Opt-Out. If you would like to opt out, you can choose to Re-Gift 100% of your tokens this epoch.

Re-Gifting Options:

In the newest Coordinape version, each user can signal what they would like to do with their GIVE at the end of the epoch, by choosing a Re-Gifting amount. Re-Gifting will burn give you have recieved, which will increase the wieght of all GIVE that has been given to others. This is identified in the Epoch Settings page, and can be changed at any time during the epoch.

You can choose to:

Re-Gift 0%. This means that the contributor will keep their GIVE, as a normal Opt-In option.
Re-Gift 25%, 50%, 75%, 100%. This allows the contributor to choose percentages of their received GIVE to redistribute. This option will burn GIVE received, increasing the weight of unburned GIVE that is accrued across the circle.

Re-Gifting Phase:

The last day of the epoch will be a 1 day window during which Re-Gifting can still occur. At this time, all initial GIVE has been allocated and locked, and only Re-Gifting options can be edited. When the Re-Gifting phase concludes, final results are displayed and the treasury distribution can be prepared.

Please note that your epoch timer (on the Allocations Page) will not include this day.