[Informal Poll] - Increasing the SourceCred payments

I don’t think you should discredit yourself. It’s because of people like you and the other Community Members that I wake up every morning and the first thing I check is this Forum and the Maker Rocket Chat. Every bit of your participating helps shape & build this DAO. So, I believe you deserve every DAI and Conti that you have earned via SourceCred. You should check out other Community Forums that don’t incentivize their communities. Pretty much ghost towns…

7 Likes

Huge :+1: here.

I might be as bold as to add that you may not be considering how valuable your input is here @ultraschuppi ! Even if you discount the (extremely) valid points Frank brings up, the “chores” you do for governance are part of what keep this efficient machine running. How much unpaid labor do you think you were doing before SourceCred? As much as we rely on MKR holders being incentivized to set good governance, without real people putting in tangible work the rocketship never takes off.

For some prospective we currently spend less than 350,000 DAI on SourceCred per year. Without pointing to any Core Units, it’s fair to say that would be a minimal personnel expense (would be right around 3 facilitators in the GovAlpha budget). For that small expense we not only bring in new voices and opinions to the DAO, but also get the chance to say thank you and give back to dedicated community members that would be out here giving their time anyway.

8 Likes

100% THIS!

3 Likes

It is what large organizations spend on their office supplies. Bang for the buck, I personally believe it help bring new ideas. With what is coming in 2022, we will want to attract the next round of community members!

6 Likes

Right now, it feels like there’s a pool to be distributed about the participants. (Am I right on this one?)
If the participants grow in a given month, the Dai received by each will diminish.

Why are we aligning rewards in this zero-sum game? We want people to tell their friends to come, not the opposite.

Should we not try to find a Cred baseline and assign it a certain amount of Dai, and if more people are participating, we give out more Dai (and vice-versa)?

Exempli Gratia: in a “quiet” month, we might give out a total of 3k Dai; if the next month we triple the activity, we might give away a total of 9k Dai (we should cap it at some number to avoid Governance Alpha going bankrupt).

I’m not sure if it’s possible to tweak the algorithm to do this.

Unless my premise was wrong, in which case I’ll see myself out.

6 Likes

An excellent point, especially considering we want to be growing to pay more contributors all the time!

Practically, it’s super easy to input different distribution numbers in the SourceCred instance. Budgeting might be a concern though, as currently it’s up to the GovAlpha budget to support SourceCred so increases to payouts would necessitate a bigger distribution to the Core Unit. I wonder if there’s a way to automate the size, otherwise maybe a Parameter Proposals Group might be reasonable.

Well, some people are arguing that they’re receiving too much.
I think it’s just about finding the right number (I’m making it sound easy so someone tries, but, shhh, it’s a trap).

2 Likes

Voted Abstain for obvious reasons (I administer Maker’s SC instance).

Such an interesting thread! Loving all the intelligent discoruse :heart: Composing a mega comment now that addresses all the things.

3 Likes

Give credit where credit is due. Quality posts are valuable and should be rewarded to the fullest extent the DAO is able. This community has so many bright minds. I love reading the forums to see all the dialogue every couple days.

1 Like

Voted Abstain for obvious reasons (I administer Maker’s SC instance).

Below is some additional context re: SoruceCred’s relationship with the DAO, as it relates to this change, as well as inline responses to objections and proposed ideas.

SourceCred Working Group → GovAlpha CU

SourceCred has been receiving a 5k DAI/mo dev grant from the Foundation for prioritized support and development of new features. This grant program was sunsetted at the end of March. So, as @LongForWisdom mentioned, the GovAlpha Core Unit (CU) has taken over paying SourceCred. For transparency, while we have not yet implemented it, SourceCred has proposed (and GovAlpha agreed to) switching from the 5k DAI/month flat amount to SourceCred’s preferred tithing model (used by SourceCred’s other partners), whereby SourceCred receives 5% of the Cred and DAI distributed. In addition, I will be paid 2k DAI/month to continue providing priority support for Maker’s instance, as well as opting myself into payouts, as is standard practice in SourceCred’s other partner communities. At current distribution levels (~20k DAI/mo), Maker would be paying roughly ~2,500 less per month than under the previous arrangement. If distribution was doubled to ~40k DAI, month, SourceCred’s tithe would equal ~2k DAI/mo, and total cost would likely be around 4.5-5k DAI/mo.

While there is some potential for conflict of interest here, SourceCred believes the tithe is the best way to align incentives. If Maker decides to increase the payouts, here or on other platforms, its costs will likely increase as well. SourceCred community members contributing in partner communities are paid via SourceCred (and vice versa), and we haven’t seen any issues with that yet. On a personal note, I also requested to be opted into payouts so I would be incentivized to contribute here more. The discourse on here is great, and I’d like to post more on issues related to SourceCred, as well as decentralized governance, etc.

Governance of SourceCred parameters

Thus far, parameter changes such as increasing the distribution amounts, changing the payout formula, and tweaks to the algorithm have been decided by the SourceCred working group, which is now under the GovAlpha Core Unit (CU). Eventually, the plan is for the governance community to make these decisions.

Since the budget for SourceCred is currently under the GovAlpha budget, if MKR holders were unhappy with SourceCred, they could defund it. As @prose11 noted, this arrangement limits how quickly we can increase distribution amounts. The Parameter Proposals Group they suggest seems reasonable to me as well. I will leave it to the community and facilitators to determine proper polls, Signal Requests, etc.

Gaming

While this is certainly a concern, I think we could double payouts without too much risk of extra gaming. In part because of mitigation strategies such as trust level-based minting, a feature SourceCred built for Maker, and the 10 DAI minimum to receive on-chain payouts. It is also just very time-consuming for new accounts to begin accruing enough Cred to collude effectively, due to strong moderation on the forum and the high barrier to entry to meaningfully participate in Maker governance :sweat_smile:. This could be mitigated further if only certain high-context contributions (e.g. governance actions) are paid more.

One thing I have seen is an uptick in brand new accounts opting in to SourceCred with no activity or likes. Some of which never post. My guess is they’re fishing for airdrops. However, they never receive on-chain payouts, and those ETH addresses aren’t currently stored anywhere in the instance. Keeping an eye on it.

Optimal pay

This one is tricky. The Maker community is very diverse. For some the payouts are pocket change, not enough to change behavior. For others, it’s a meaningful, potentially life-changing amount. People also assign different meaning to the payouts.

I am a little surprised at people thinking they’re overpaid.

I have specifically thought @ultraschuppi and @AstronautThis were if anything underpaid :confused: Ultrachuppi because they do governance tasks we want to incentivize generally (MIPS, Signal Requests, etc.). AstronautThis because they’re a newcomer that has been consistently racking up Cred (recruitment is a goal of SourceCred). I think they may be undervaluing their contributions. I do however think a danger of doubling payouts would be to increase the number of people that think they are overpaid. I fear the system loses legitimacy if it is perceived to be way overpaying (which it may well be in some cases).

My personal feel is that the amounts are about right for most contributions. However, I think there are contributions and contributors that are underpaid, in which case an increase in payouts could be a useful experiment. SourceCred can be configured to selectively value certain types of contributions higher. Which contributions will depend on what SoruceCred is good at incentivizing (and what it is not), and what the community thinks SourceCred should incentivize more (or less).

Headed to sleep here, but returning tomorrow to address ideas around incentives and some valid arguments against an increase.

5 Likes

I think SourceCred is great, as I commented several times.
I express some personal wishes for the future (I know you have been working on some of these, but if the bond between Maker and Sourcecred is increasing, I think it’s ok to ask):

  1. it would be awesome to have more frequent and automatic payouts.
  2. In a world moving to L2/sidechains, it would be nice to be able to receive the payouts in xDAI/arbitrium. In such a space, even daily rewards would make sense. Or even “streaming” of rewards (dreaming).
  3. Allow to make “Cred tips”. Often I see amazing posts of others, and I’d like to tip them somehow. I always push the like button, but sometimes I wish I could give more! :heart_eyes:
4 Likes

This is exactly what I have been doing with my coworkers to try and get them into crypto/DeFi. SourceCred should be the gateway portal for the future of finance via MakerDAO governance. It is a huge learning curve when you do not even know how the current financial system works. So, I think it is essential to incentivize new users to spend the time to learn the ropes. And after some time getting comfortable with the protocol I am sure they will want to own MKR which is a net positive. SourceCred is not a money-losing scheme, but an investment in the future of this protocol and DeFi more generally.

3 Likes

I couldn’t agree more. I’m arguing that the current model is promoting the exact opposite by being a zero-sum game.

3 Likes

Reply continued…

Before diving into concerns and ideas, I think it’s useful to ask the question, what goals of the DAO is SourceCred furthering? I’m seeing a number of different perspectives here.

Is it a tool to retain and expand the community?

In my observations of SourceCred in the wild, it does increase engagement. At the end of Maker’s first 3 months trialing SourceCred, engagement metrics were up, as detailed our final report. Below is a chart of Cred over time (a proxy for work) since Maker began using SourceCred in June 2020. While correlation does not equal causation, engagement appears to be on a general uptrend.

SourceCred also appears to have been a factor in several community members deepening their committment and taking on more formal roles in the DAO.

I have opted out several community members from payments because they took on paid positions in the Foundation/Core Units, such as @hexonaut, @SebVentures and @juan. Did SourceCred help pull them in? Curious if they have reflections.

For some, it provides a sense of belonging.

And consistent engagement over time is key to that.

Is it a competitive advantage?

It seems so.

I have seen similar anecdotal evidence elsewhere. Not just in communities using SourceCred, but also on Reddit subs I frequent, such as r/ethtrader and r/CryptoCurrency, which are distributing ERC-20s based on karma (a reputation system similar to SourceCred in some ways). I regularly see people on these subs report that they spend more time posting there because they can get paid, at the expense of subs that don’t pay. I asked to be opted in, in part because I could feel the opportunity cost, and want to be incentivized to post more.

Does it advance specific goals of the DAO?

Here, it appears there is room for improvement.

Even a contributor doing actions we’re looking to incentivize is skeptical.

I would argue that community for its own sake is valuable. Indeed, in the rapidly evolving DeFi space, community is increasingly viewed as a competitive moat. Anyone can fork a protocol and offer financial incentives. If all you offer is yield farming, you can always be outbid. It’s very difficult to fork real community.

Also, I’ve noticed that this forum has become something of a ‘stage’. It’s well trafficed. Crypto famous occasionally drop in to opine. Reporters are here. I’ve seen Cointelegrah articles in recent months that were clearly just a recap of a post here. That is presumably good for Maker’s brand.

Is it just the morally correct thing to do?

I’ll leave it for the reader to decide (there are good arguments against paying too). However, I do see a general desire among crypto projects to reward its community members, especially when large sums of money are being made. And there aren’t any mechanisms I know of that are as credibly neutral or automated as SourceCred.

In summary, I think SourceCred is all of these things and more. It’s expressive enough to capture a lot complexity and nuance, even with its blind spots. Sometimes I wonder if SourceCred is just automating Maker’s internal political economy :exploding_head:

However, SourceCred is still relatively young, and has downsides and risks as well. I also think Maker has created a very unique, strong community (could do a whole separate post on that), and don’t want SourceCred to interfere with that, only strengthen and grow it. I would recommend Maker moving “at the speed of trust”, as we’re fond of saying in SourceCred. Below I address some concerns and ideas, in the spirit of that :point_down:

Concerns

@MakerMan is one of the few people I know who has contributed in nearly all of SourceCred’s partner communities, and generally offers valuable insights. I suspect they may be right here. At least if we keep the current configuration. I will say that MakerMan is likely representative of many contributors, but not all.

Ah, but what are the real community goals? The 100B DAO question. It seems Maker is still figuring this out, via projects like Project Compass. SourceCred is going through a similar process right now actually as it decentralizes. It’s difficult work. Which maybe should be rewarded?

It is certainly true that certain contributors, often devs, can have outsized impacts. However, whether a contributor or contribution is 10x, 100x, or -10x, is typically an individual, subjective judgement. Objective metrics are often worse. SourceCred I think does a good job at capturing the complex, intersubjective reality. However, I do think that currently SourceCred has some blind spots that make valuing (and incentivizing) certain high-value contributions difficult. To increase rewards significantly, I think more customization work may be needed (more thoughts on this coming).

Actually, we used to use posts as a metric, but switched to likes due to initial feedback from Maker–we were seeing contributors with a high volume of low-effort posts get too much Cred. Cred is now minted on likes, then flows through the graph. If you’re curious, here’s a discussion on SourceCred’s discourse about that change. We are encouraging more posts I think, but only to the extent people like them. I haven’t yet noticed significant ‘like inflation’ (the attack vector with this strategy), and the scores are still high quality IMO (open to challenges on this).

We’ve actually tracked an increase in engagement, as explained above. However, we can’t be sure this was caused by SourceCred, and not other factors. I will say we’ve seen increased engagement with other communities as well. I think conflicts of interests can be mitigated by MKR holders ability to defund it.

OK, crashing again here :zzz: Will be back tomorrow to address some of the proposed ideas, and provide context and some recommendations.

15 Likes

I think I speak for the three of us when I say that it didn’t. We were involved (in a way or another) before SourceCred was implemented.

Looking forward to it.

4 Likes

I could have not written this any better! Thank you Seth for creating this “Forum Post Breakdown” – so cool.

You know when I think about it–the SourceCred tool provides an attractive and vindicating user reward, that I really think you and your Team are on to something here. Please keep building and creating–you are changing the game for the end-user. Much appreciated–looking forward to new ideas/recommendations.

2 Likes

Great to hear! And big Thank You to Maker and community members like yourself who took a chance on SourceCred before anyone knew about it, and for being such great partners. It’s had major positive impacts for our community and product.

2 Likes

For me personally and I suspect most others, I signed up and started posting to learn as much about MKR as possible. The community has been incredibly welcoming and patient in helping newer members get up to speed on the complexities of MKR.

I hadn’t really heard of SourceCred until you messaged me and my initial reaction was that this must be some sort of scam until I saw your name (how many DMs have we all gotten on other platforms about free money in crypto?). I opted in out of curiosity and didn’t check what payments I had received until recently.

After receiving my first payment, I experienced similar feelings to @iammeeoh as to a sense of belonging to the MKR community. As a result, I’ve been spending more time on MKR and less time on other protocols’ forums. If other people are similar, I believe SourceCred is a net positive to the community and protocol as a whole - we want to continue to engage and retain new members of the community and this is an inexpensive way to accomplish that.

8 Likes

Can’t thank you enough @s_ben for the time and care it took to construct this reply. You know I am a supporter of sourceCred but you also know I am a big fan of data. Nice of you to put the arrow in when SourceCred started. I remember we doubled the SC rewards once (didn’t that happen?!) Could you put in an arrow to where we did that?

I think @AstronautThis had a valid point wondering if we were maybe at a saturation point where more rewards wouldn’t get much more participation. Personally I am all for experiments as long as we are willing to try SC rewards down at some point.

2 Likes

Reply continued…

In the last two replies, I offered thoughts on SoruceCred governance, gaming, and optimal payouts, and the goals of SourceCred and concerns raised. Here, I’ll address some of the proposed ideas, offer context around what is currently possible, and my personal opinions (not official SourceCred opinions).

Seeing a lot of relevant concerns and good ideas. Before addressing those, a quick primer on the levers SourceCred exposes:

  • Tweaking algorithm weights
  • Utilizing features of the Discourse plugin (e.g. the feature SourceCred built for Maker that allows extra Cred to be minted on topics with certain categories and tags)
  • Changes to payout amount (e.g. the last increase back in Nov 2020 from 2.5k DAI/week to 5k DAI/week).
  • Changes to payout formula (e.g. when we changed parameters to make the algorithm more responsive and pay newer contributors more)
  • Education: more knowledge around the algorithm, which may mitigate accidental misalignment, and give the community ideas for further customizations (hopefully this will help :sweat_smile:)

Payout formula ideas:

One thing to keep in mind here is that the GovAlpha CU (which is funding SourceCred) has, afaik, a fixed budget through June.

DAI vs MKR

Since the beginning, the community has been split over whether to distribute DAI or MKR. When we surveyed the community for our final report, the split was roughly 50/50:

  1. Do you, or would you prefer to receive MKR through SourceCred rather than DAI?

RESPONSE: (16 responses) 3 for MKR, 3 for DAI, 10 for No Preference, of those No Preference votes 3 advocated for 50/50 allocation, and several references made to leaving it up to users

When this has come up subsequently on the forum, the responses have seemed roughly 50/50 too. Arguments against focus on volatility of payouts, tax concerns, and dilution of MKR. Arguments for MKR generally focus on aligning incentives and increasing governance participation.

Also worth noting that deciding how to source the MKR and implement that could be difficult.

Personally, I think MKR would be better. While I am sympathetic to the volatility argument, especially for contributors with greater financial needs (indeed, working on SourceCred for me is meaningful largely because it pays those contributors), I think it better aligns incentives. If payouts are increased, I think the argument for MKR becomes stronger, because introducing more volatility may deter those posting solely for the money, which could dilute the culture and mission (more on this later). Working for a volatile governance token is a sign of skin-in-the-game. As would putting it in the hat, which could be detected.

There are also ways to mitigate the volatility for those than don’t have the ability to shoulder it. Like pegging to a fixed dollar amount at the time of distribution. Volatility can also, when the price is mooning, catapult contributors into a place of financial security, creating loyalty (psychologically, money earned is valued more than free airdrop money). I have seen this effect firsthand when I working for the Decred DAO for DCR, its governance token.

For the time being however, I think the support for DAI and high costs associated with a switch to MKR may keep us on DAI for a while.

So this is basically what 1Hive settled on. 1Hive is currently distributing $20k/week of their governance token (among other uses) HNY, up to 30 HNY. They’ve revisited this several times when a proposal is up to fund SourceCred payouts. The 30 HNY cap I presume is to protect against the token mooning and the rewards being too high, which risks increased gaming; this did happen last year actually during an earlier moon when rewards accidentally skyrocketed to ~$60k/week. SourceCred was able to work with 1Hive (a tithing partner) to mitigate the gaming and build features to protect against it. But would not recommend trial by fire. Previously, I wouldn’t have worried about MKR mooning, but dayum :rocket: :rocket:

Dynamic payouts

Correct. With a fixed amount, as each new contributor opt ins, the DAI distributed to others diminishes. Indeed, we’ve seen a steady number of optins in the last few months, with a recent uptick due to @Elihu’s outreach efforts. We’re up to 83 now. I have not been particularly concerned about this yet, because of two factors: 1) we have opted out several high Cred earning contributors like yourself, freeing up DAI for newcomers, and 2) a relatively small number of newcomers stick around and earn significant Cred; Maker governance is hard :sweat_smile: I also just spot check the balances going out whenever I do payouts, and my gut feel is that most new contributors are being rewarded fairly. Though would love to hear other perspectives on that.

Personally, I have been surprised that I haven’t felt that zero sum energy yet. And haven’t heard complaints yet, at least not in the SourceCred community. That does not mean it isn’t there. I’m just one perspective, and this is by definition something people might not speak up about.

I think this would be better from an incentive standpoint. I even wrote a post imagining distribution amounts calibrated using the Bitcoin difficulty algorithm, with Cred functioning as hashpower, or Proof-of-Labor (PoL). Pegging 1 Cred to a set dollar amount has also been proposed for payouts in the SourceCred community. One objection to this is that it incentivizes ‘like inflation’, giving the community a way to increase payouts without increasing value delivered. Another is that it just makes budgeting more difficult, as would be the case with Maker.

Time limited payouts

My initial reaction is no, even though some communities do seem to be discovering SourceCred’s primary utility for them is recruitment. However, I think there could be value in giving people an ability to express their preferences, either explicitly with actions or implicitly with inaction. Perhaps people that completely check out and don’t care could have their DAI/MKR balance displayed or used differently. Perhaps those with more financial resources would be happy to put their balance to work earning yield for contributors with less resources. Just spitballing, but I suspect introducing friction and illiquidity could actually be useful here somehow.

Reducing payouts

It would be an interesting experiment. Have not seen a community that started flowing rewards using SoruceCred turn it off.

Distribution infrastructure ideas:

Our gast costs for the last batch distribution were $470 in ETH :grimacing: We’ve recently started exploring L2 solutions as part of a larger design to distribute DAI directly from the protocol, but this is at a very early stage, and wary to jump into L2 wars before we have a clearer picture of the engineering limitations.

This is on the roadmap:) SourceCred doesn’t have an actual roadmap yet, but we’re looking to start work on this in the next month or two. Likely starting on mainnet though, and gas costs could limit frequency.

Obsessed with streaming payments. Sablier was a Maker dev gran recipient, which is pretty cool. I know Superfluid is on xDAI now as well and doing interesting things. The main concern there (aside from smart contract dev bandwidth) is security. Currently, a human (typically me) has a chance to review Cred scores and payouts before sending them out. This provides and opportunity to catch gaming. With real-time streaming payments, and distributing large amounts, a gamer could potentially siphon off a lot of money before being detected. Not only that, it would make gaming into a hella fun game :slight_smile: Which is partially why I want to see it. But Maker is maybe not the best place to try it first.

Algorithm tweaks

Creating separate one-time Cred instances could be easier operationally actually. I kind of like this idea. Programming different goals into a single instance can be tricky, as it’s more difficult to evaluate the desired outcomes in the scores.

We’re currently investigating using the category and tags minting feature developed for Maker to incentivize governance actions. This will allow us to apply a multiplier on Cred minted on topics with a given category or tag. The has been delayed due to some unexpected quirks in Cred flows in simulations, and a recent upgrade of the core algorithm. Hoping to present the SourceCred working group with some options on this soon.

This is the way.

I wonder though what the optimal (and sustainable) growth curve is for the community. Is the growth prediction @Planet_X made in the post that started it all coming true?

Does the Maker governance community have the bandwidth right now to onboard new contributors, execute on its larger decentralization plans, Core Units, etc. and create a governance process around changing SourceCred parameters? To be honest, I hesitate to bring all this up, as I know from experience how much work it can be, and I know there’s a lot of other important priorities right now competing for scarce attention :sweat_smile:

This could be happening weakly already due to the badges? Do people engage more with those with lots of badges? There is precident for this from different angles. The Friends With Benefits (FWB) community, which was running SourceCred, required I believe 3 FWB tokens to get into their Discord and get Cred and FWB distributions using SourceCred? (cc: @Cooopahtroopa). 1Hive I believe requires that you have 1 HNY to have a certain role on their Discord, which allows your reactions to mint more Cred. MetaGame gates their community (and therefore Cred) according to consistent activity OR holding a certain amount of their token, SEED.

These implementations though are either gating comms platforms, or giving people with certain roles more power to influence the Cred graph. I can’t think of a community using SourceCred that has tied governance actions directly to Cred issuance (though it could totally exist). One interesting comparison is a recent proposal on r/CryptoCurrenty to distribute 20% more MOONs (the ERC-20 they distribute according to karma) to users that keep their MOONs in their Reddit Valut, where tokens have to be to vote on governance changes in the sub (i.e. their hat). Karma is a reputation score similar to SourceCred in some ways. Reddit and Discourse are both forums. Could be good lessons there. As a side note, have been impressed with the ability of these subs to govern their tokens and communities. Makes me bullish on the idea.

In summary, I think Maker could double payouts safely. I think any gaming could be addressed. But personally (again, not an official SourceCred position), I’m a bit hesitant though because of a few factors: 1) we could be overpaying for some contributions, which may have unexpected negative effects, such as delegitimizing the scores or creating unrealistic expectations, 2) we may see more contributors contributing just for money, which could affect cohesion during a sensitive transition period for the DAO, 3) we currently don’t yet have a governance process for the community to reach consensus on protocol changes, and 4) the current budget for SourceCred has been approved through July.

I think increasing payouts will be more feasible once we gather more feedback, gain the ability to target certain contributions we think are undervalued (e.g. through category and tag weighting), and have more clarity around governance issues and the community’s goals.

PHEW, Great thread!

9 Likes