The DAO is seeking approval for a change to the current compensation framework, which puts more weight on the timely delivery of projects.
The compensation framework outlined in OIP-102 has served the DAO well over the past 6 months. However, we believe there is room for improvement.
Due to the overall market sentiment and events that transpired in this year, the OKRs, most of which were market-driven, have not been met. These OKRs were meant to be difficult, but the main issue we found was that the contributors couldn’t directly affect them and thus felt unmotivated when it was clear the market wouldn’t allow us to reach them.
The proposal below outlines how we plan to tackle that problem, as well as ensure timely completion of projects that are in the best interest of Olympus and its community.
Instead of the current OKR-based bonuses system outlined in OIP-102, allow for a total bonus budget of $1,000,000, to be paid in (g)OHM. This budget would be allocated to projects submitted by the DAO to the community for approval, with the requisite that in 2023 there are at least 3 projects passed by the community and with a maximum bonus per project of $333,333.
All DAO contributors above an average contribution level of 4, active in the DAO over the course of a project and at bonus payout would receive their share of the bonus allocated to that project at the end of the calendar year. The contributor’s bonus share would be weighted based on the average contribution level over the course of a project.
As long as projects are completed within a month of the deadline (deadline + 1 month), the bonus for that project would be paid out in full. After that point, the bonus would start to decay on the following scale.
In addition, for the Council members and Strategos (department leads), given their lower base compensation compared to the role, introduce a potential bonus of $120k per person, to be distributed only in the case of successful and timely (deadline + 3 months) completion of all projects that passed a community vote, again, no less than 3 over the course of 2023.
In the case of completed projects that had their bonus decayed due to not meeting deadlines, but no more than 3m past the deadline, take the weighted average of the bonus percentages to calculate the percentage of $120k that has been earned.
This compensation structure is meant to align the compensation with the responsibilities of the department leads, responsible for their respective departments, and the Council, responsible for overseeing the whole DAO operations.
Projects that unlock bonuses must be deemed high-impact projects and will be submitted to a community vote via an OIP. Each project proposal must contain a description of the project, definition of what constitutes project completion and a deadline for which the DAO will be held accountable for. Along with the project spec, it must contain the bonus allocated to it for timely completion (100%).
In the extraordinary case that, after the initial project proposal to the community, a project deadline needs to be extended due to unforeseen circumstances or better solutions/improtvements are found, or a project needs to be deprioritized or canceled for justifiable reasons, the contributors would need to request this from the community and provide a detailed explanation in a OIP forum post.
Up until now, the DAO has worked within the limits outlined in OIP-102 - a $370k monthly base compensation budget, with an allowance for a maximum budget flex of 25%, making the potential maximum budget in any given month $462.5k
Given the proposed introduction of project based bonuses, as well as a more efficient DAO today, we propose that the monthly base compensation be reduced to $280k, with the same allowance for a maximum budget flex of 25%, making the potential maximum budget in any given month $350k This is a 24% reduction in the monthly base compensation budget.
We predict a legal budget of up to $200k will be needed for 2023. The law firms will be assisting Olympus with the following:
Evaluate potential compliance improvement areas
Identify any proposed risk mitigation steps to be taken by Olympus to comply with applicable law and regulation
Evaluate legal requirements that mandate, and/or prudential risk mitigation considerations
Advise Olympus with respect to the design of any compliance programs, and preparation of appropriate policies, procedures and internal controls integral to such programs, for presentation to the Olympus Community
Prepare summary recommendations(s) describing the proposed risk mitigation steps, and compliance programs to be implemented, for approval by the Olympus Community
As outlined in OIP-98, the community approved a yearly audit budget of $500,000. This is just an allowance and does not mean the DAO will need to spend the full amount.
Services, Subscriptions, Other Operational Costs
The estimates for subscriptions and other operational costs are based on historical data. Services and service providers (simulations, risk analysis, etc.) are variable and not included in this budget framework. Instead, they would be listed in the quarterly report.
The budget below is the projected maximum, with maximum spend in all categories (not including potential budget flex of 25%) and full bonuses unlocked.
The DAO currently holds 1,559,510 OHM worth $15,454,744, visible here.
The spend for 2022 can be found in our Q4/2022 report which will be published this week.
In the case that market conditions change and the compensation needs to be adjusted in order for Olympus to stay competitive, the Council would propose an amendment to the community for approval.
The Council also reserves the right, outlined in OIP-91, to approve urgent expenses, including but not limited to security-related expenses, tooling costs, contracted services. These expenses must be detailed in the quarterly report.
If this proposal passes, it would nullify and supersede OIP-102.
The goal is for the Snapshot vote to be held by the end of January so that contributors and the community have clarity on the budget, compensation and bonuses in 2023.