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# System prepended metadata

title: 'ECP-1B: Formalizing the Workstream (subDAO) and Compensation Framework'

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# ECP-1B: Formalizing the Workstream (subDAO) and Compensation Framework 

**Author:** LPX, Evmos DAO Governance Council

**Summary:** Workstreams, also known as subDAOs, guilds, committees, etc., are long-term projects with distinct, high-level objectives that are aligned with the main DAO. Coordination at scale requires a distributed organization — and distributed organizations require a certain level of coordination and set expectations to work together effectively. 

**Abstract:** Workstreams and subDAOs are key in “scaling a DAO” and are crucial in grassroots community growth. The Workstream Framework introduces a fractalized blueprint of subDAOs and teams, the incentive alignment mechanics, funding and formation processes, and expectations.

One of the core guiding values in our Constitution is the *Sovereignty to Work*. Every team, workstream, subDAO — whatever title they wish to be called by — will be unique in how they operate. The long-term vision and goals for how workstreams operate are:

 - All subDAOs will take care of their own internal governance, compensation, and allocation of responsibilities (leadership roles within the subDAO are encouraged when practical)
 - All subDAOs will be aligned with the main DAO in the goals and mission listed in the Constitution. 
 - All subDAOs will be responsible for providing updates to the community and remaining as transparent as possible. 
 - All subDAOs will constantly self-assess its performance and efficiency, making adjustments and personnel changes if needed. 
 - All subDAOs will help the main DAO in identifying key organizational needs and bottlenecks that needs to be addressed

However, the need for more infrastructure, education, and tooling in order to achieve these goals is recognized and is something that the Governance Council is constantly looking to improve. 

**Motivation**: The motives for a highly efficient, well funded, and a self-governing community should come as no surprise. An engaged community is a healthy community, and all contributors and participants in the Evmos ecosystem is a stakeholder. The DAO has the ability to engage with the community at large in ways that no centralized entity can; as we try to iron out our current inefficiencies, we will do so in a way that the community can participate in. 

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## 1. Definition and Purpose

Workstreams are typically DAO-funded teams with a recurring budget with no termination date (i.e., Community Moderation & Support, Marketing & Creative Services, etc).

Workstreams are the sub-units of how Evmos DAO advances its purpose. A workstream is a group of people actively working on tasks that align with Evmos' [Constitutional Values](https://gov.evmos.community/constitution#3-guiding-principles-and-values) and community run initiatives. As such, ratifying workstreams sets boundaries on what is and isn't in scope for Evmos DAO's governance.

## 2. Workstream Requirements

Anyone may start a workstream and gather momentum behind it by posting on Commonwealth. Until a formal proposal for a budget is made, this workstream is considered “informal.” A workstream can be as broad or narrow as its initiators like, but workstream proposals must satisfy the following criteria:

 - Have a clear objective that aligns with Evmos' values and objectives as listed in the 
 - Distinguish itself from or explicitly state its improvements on existing workstreams.
 - The specific KPI that the sub-DAO will focus on driving success in
 - The actual work that the sub-DAO will undertake to drive toward the KPI
 - Propose clear budgets and timelines for producing outcomes and all in line with the ECP framework. 


## 3. Workstream Formation Process

Workstreams can be formed through the [Evmos Community Proposal Framework](https://gov.evmos.community/governance/proposals). The proposal process can be read more in-depth here and the proposal must include the [Workstream component template.](https://gov.evmos.community/governance/proposals/templates#d-workstreams--special-initiatives)

The burden falls mostly on the proposers of the subDAO, i.e., the sub-DAO must convince the Evmos Community to fund its operations and support its mission. In other words, the sub-DAO should lobby for its formalization and funding proposal to pass.

A great way to build trust within the community is to operate informally first.

## 4. Workstream Stages

Workstreams have four potential states. The states of each stages are outlined below:

 - Informal
 - Proposed
 - Active
 - Inactive

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## The Standardized Compensation Framework

Our goal is to scale the Evmos DAO by attracting and retaining great contributors and leaders. However, as the DAO is still experimenting as a relatively player in the space, the Compensation Framework is likely to be amended or even completely overhauled in the future through a governance proposal.

**Compensation Principles**

The Compensation Model is based off the following core principles:

1) **Meritocracy**: all contributors’ positions and compensation should be earned from substantial contributions to the DAO.
2) **Accountability**: all constributors shall be held accountable for the duties and responsibilities bestowed upon them by the Community
3) **Recognition**: Early contributors, past contributions, and outstanding work should be recognized and rewarded.
4) **Scalable**: the model should be able to ajust and properly accomodate new contributors as the DAO grows.
5) **Competitive**: compensation rates should be competitive with market rates
6) **Retention**: the model should be designed to align contributors' with the long-term goals of the DAO. Talented and dedicated members should want to remain working with the DAO.

**Compensation Types**

1) **Retroactive Compensation**: compensation and rewards for previous contributions made to the DAO. There are two types of retroactive compensations that can be requested: time-based and achievement-based.
2) **Base Compensation**: monthly compensation for contributors' fulfillment of expected duties and responsibilities. 
3) **Vesting Compensation**: Revokable compensation in the form of 4-year token vesting contracts to encourage long-term commitment, combat contributor burnout, and attract talented contributors. 

**Compensation Eligibility**

Compensation in the scope of the Contributor Compensation Model must be a listed member of a Workstream or subDAO. The contributor's duties and responsibilities must be clearly outlined when the workstream is being proposed for funding, or during the onboarding process of new workstream members. 

When a workstream makes a formal funding request the list of team member roles must include:

- The role the contributor plays
- The weekly time commitment
- The monthly compensation amount
- Compensation rationale (base and vested)

Community ownership of a project rests on transparency, and transparency rests on legitimacy. Salary will be transparent to all DAO contributors, through a standardized base compensation framework for all current and future workstream members.

This framework also aims to increase equity between workstreams as well as between network stakeholders & the DAO, reducing the power imbalance/privilege that certain parties may have.


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### Base Compensation

![](https://i.imgur.com/x0e7pWT.png)

**Base Compensation Parameters**

1 | **Value Level** - refers to the contributor’s expected value created during the compensation cycle on a scale of 1 to 3. While measuring the value of a contributor is challenging and subjective, the following matrix will hopefully assist in the assignment of each contributor's level.

| Value Level Assessment |   Summary | 1 | 2 | 3 | 
| --------      | -------- | -------- |-------- |-------- |
| **Knowledge Requirement & Difficulty**     | The amount of domain-specific knowledge required to successfully execute one's duties. |  Basic working knowledge. Obtainable through a couple weeks of onboarding and training.  | Domain-specific knowledge. Obtainable through years of study or training in a specific domain. | Niche or advanced knowledge. Subject matter expertise that is only obtainable through years of deep commitment and experience in a niche field. |
| **Replaceability & Talent Pool Size**  | The difficulty of finding or replacing talent for the duties required by the role.  | Roles can be filled with relative ease. Large pool of potential workers due to low barrier of entry. | Thorough vetting required, can take months to fill. Contributor should have experience in the domain and will be expected to excel in assigned duties. | Difficult to replace, domain-expertise in addition to deep organizational-specific knowledge required (i.e. knowledge in the DAO's governance processes, financial and revenue structures, ongoing projects, etc.)  |
| **Contribution Importance** | The level of importance of the duties held by a contributor for the long-term success of the DAO as well as the Evmos network. | Little to no effect on the Evmos ecosystem. Such roles are likely to be in experimental workstreams or external-facing projects. | Important to the long-term growth of the Evmos ecosystem. | Crucial importance - contributions will have long-term ripple effects on the DAO and the Evmos ecosystem. |
| **Value Level**     | Calculated by simply taking the average of the three aforementioned  assessments.  | -------- |-------- |-------- |

2 | **Commitment Level** - The DAO will cap time full-time commitments to 40 hour work weeks for a total of 160 hours / month. Extra commitments are not officially recognized by the base compensation framework - this responsibility will be given to the Evmos Community and workstream leaders. 

Commitment Levels are expressed as percentages, with 100% representing A) a full-time commitment and B) the sole prioritization and focus on the duties assigned by the respective workstreams of Evmos DAO. Part B of the Commitment Level is self-assessed, and each contributor shall publicly declare their prioritization levels (i.e. secondary job commitments, contributing to multiple workstreams, contributing to other DAOs or chains, etc.)

Example scenarios: 

- Full-time commitment and 100% prioritization of workstream duties -> 100%
- Full-time commitment with 20% of focus/prioritization of a secondary DAO -> 80%
- Part-time commitment of 32 hours / week with 100% prioritization of workstream duties -> 80%
- Part-time commitment of 20 hours / week -> 50%

The self-assessment of Commitment Levels is very untraditional in the sense of "normal companies" - this is intentional, as the DAO space has repeatedly shown the value in cross-chain / cross-DAO collaborations and networking. 

Contributions to other projects and DAOs are encouraged! *(Just remember to make a note of it and adjust your Commitment Level accordingly)*

3 | **Base Rate** - The base rate is currently proposed at $28/hr. The Community may vote to adjust the hourly rate through a governance proposal to account for changes in market conditions and/or treasury reserve levels. 

**Calculating Base Compensation**

`Monthly Compensation = ($28/hr base * Value Level) * (160 hours * Commitment Level)`

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### Vesting Compensation

![](https://i.imgur.com/AlegqqD.png)

**Vesting Compensation Parameters**

1 | **Contribution Level** - Every workstream and subDAO should be working on a 6-month funding cycle. Workstream leaders are required to provide the Community a progress report every cycle and is responsible for keeping all contributors accountable in their work and their commitment. The Evmos Community, including the Governance Council, is expected to keep workstream leaders accountable in management of their teams (including off-chain governance proposals for removal and replacement of contributors).

The Contribution Level will be a point-based system in which all workstream members must earn; thus the beginning points for all members should start at 0. For each funding cycle that passes, the Contribution Levels should rise in proportion to the Commitment Level from Base Compensations for all contributors that are still contributing as active members. 

Contribution Level Awarded per Funding Cycle: 

- 100% Commitment: 0.5 pts
- 80% Commitment: 0.4 pts
- 50% Commitment: 0.25 pts
- etc.

Contribution Level points are capped at a maximum of 4 points. The accrual of 4 points would mean that the contributor achieved 100% satisfactory full-time commitment for 4 years.

2 | **Accountability Level** - With greater responsibilities comes even greater accountability. Accountability is calculated on a scale from 1 to 2.

| Accountablility | For | - |
| -------- | -------- | -------- |
| 1     | Self       | All members are accountable for their own satisfactory execution and fulfillment of assigned duties.     |
| 1.5     | Workstream / subDAO       | Workstream leaders are accountable for the continued success and advancement of the workstreams' respective mandates, as well as the effective mangement of the contributing members in the workstream.  |
| 2     | DAO Treasury & Advancements | Members that are signatories of the DAO treasury and responsible for the advancement of the initiatives laid out in ECP-3.     |

**Calculating Vesting Compensation**

`Vesting = Yearly Base Compensation * Contribution Level * Accountability Level`

- Vesting schedule for all contracts are 4-years.
- Vesting amount is calculated in USD and adjusted to the price of EVMOS every funding cycles.
- Vested tokens will be streamed from the contract as EVMOS to contributor wallets.
- As everyone's Contribution Level starts at 0 points, this effectively acts as a 6-month cliff or probationary period for new contributors.
- The vesting contracts for all workstreams and contributors will be adjusted accordingly each funding cycle, or every 6 months. The vesting amounts do not compound over time - only the total amount (over 4 years) and changes in contributor salary and level can be re-adjusted.
- The vesting compensation is in place for various reasons, but the focal points are to  retain talent and to reward long-term commitment -- thus, contracts will be revoked for contributors that are no longer serving the DAO. 
- Token vesting for contributors are executed on the EVM side. This allows the revocation of the vesting contracts through governance proposals - this ensures that the all contributors including the Council are subject to the same terms.
