Incentive Design & Tooling for DAOs

What is your relationship to the contributor to be incentivized?

This topic stirs great passion and while we all like the purity of decentralizing, sometimes "the perfect is the enemy of the good." There are excellent tools when you need incentives to be decentralized, and excellent tools when you can accept a more centralized approach. The answer for a well established DAO is likely to be different from a new o... See more

Is the work highly complex, either in the task itself or the skill required to get it done?

How much time and ability does the team have to oversee administration of the incentive mechanism? For example, bounties are an elegant solution for easily definable tasks with clear success criteria (e.g. Does the code run or not?). But a bounty needs to be defined, advertised, reviewed and rewarded, all of which takes DAO members' time and resour... See more

Streams are likely to become the salaries of Web3 because they have many of the same unique properties but provide a more digitally native and logical solution. These programmable cash flows can deliver payments block-by-block to contributors or other parties. For this reason, they are a great way to reward long term contributors and break the “mon... See more

How much time and ability does the team have to oversee administration of the incentive mechanism?This question can be very tricky. For example, bounties are an elegant solution for easily definable tasks with clear success criteria (e.g. Does the code run or not?). But a bounty needs to be defined, advertised, reviewed and rewarded, all of which t... See more

Identifying your two or three most important factors can help to answer these questions and increase the speed at which you can identify the tools and incentive mechanisms most likely to help your DAO.

Proof of Attendance Protocol (POAP) creates NFTs that signify your participation or attendance in activities. They are fast becoming a way of recording your working life and building your on-chain CV. Rabbithole.gg uses NFTs in a similar manner and rewards you for completing quests or undertaking specific actions. And most of us know how well Mirro... See more

We think that bounties are a very meaningful part of the ecosystem and are likely to grow in importance over time. The reason for this is that most legacy work practices have a high focus on 'roles' - essentially 'employment' - while DAOs are disassembling work into individual tasks or activities to be done from the crowd. This atomic view of tasks... See more