AIP 47: Contributor Circle Funding

[agriimony]

Summary

• Each cycle, a base level of funding is to be set aside from the treasury to be allocated to contributors Dev Circle: 9,000 AST per contributor Ambassador Circle: 4,500 AST per contributor Governance Circle: 2,750 AST per contributor
• Base funding levels will be regularly reviewed each month to ensure that the base funding amounts are appropriate
• Additional bonus funds will be awarded as a fraction of the total fees collected (see #46)
• Contributors who want to join the contribute to the respective Circles (Dev / Ambassador / Governance) can be onboarded via a nomination scheme via Coordinape
• Individual allocations will be determined via Coordinape and smoothed out over 3 months

Rationale

Current contributor circles are funded using different rules, making it difficult to track along how much is available for each position (and even more so for new members onboarding into our community!). By aligning the funding structure for each workstream, we hope to make the contribution process and rewards structure more transparent. With the funding structure in place, members will know how much funds are available to each workstream and can apply to contribute to the various circles (Dev / Governance / Ambassadors (marketers)) accordingly.

Furthermore, we recognize that current work may only show results (e.g. increase in transaction volumes) some time later. A fair allocation system should ensure that contributors are able to be recognized and rewarded retrospectively for their work.

Specification

AIP #10 allocated AST from the treasury for development (10% - 32.7M AST), growth (15% - 49.16M AST), and marketing (5% - 16.39M AST) with the remaining 70% (229.39M AST) locked over the next 3 years. We propose that each circle will receive a base funding of a fraction of the initial treasury allocation per contributor (defined as non-opted out members of the respective Coordinape circle), with a bonus allocation depending on the fees collected (As specified by AIP #46).

The base funding will ensure that there should always be funds for contributions, but contributors should also be aware that the funds will not be split equally on a per-person basis. Instead, funds will be distributed according to allocations through Coordinape and individual rewards will be decided by the other members of the circle.

The proposed base fundings are as follows:

Dev & Designers

• 1% of the development budget (0.33M AST) over 36 months per contributor
• This equals to 9,000 AST per month per contributor

Ambassadors (Marketers)

• 1% of the marketing budget (0.16M) over 36 months per contributor
• This equals to 4,500 AST per month per contributor

Governance

• 0.2% of the growth budget (0.1M) over 36 months per contributor
• This equals to 2,750 AST per month per contributor

This amount paid out will be regularly reviewed every month before the vote to ensure that the funds are being spent appropriately. Furthermore, if approved, this new funding scheme will only come into play next cycle.

Contributor on-boarding

Current circle members may wish to nominate community members to join the contributor circle through Coordinape. The nomination process will last for 2 weeks, during which the nominee must receive an additional 2 vouches from other members of the circle in order for the nominee to be added to the circle.

Credits

Thanks to astholder for comments on the numbers

Copyright

Copyright and related rights waived via CC0.

[gpxl-dev]

Really well thought through proposal.

Can you clarify the smoothing comment? Do you mean that bonus funds may be back-allocated to previous epochs based on the fact that past contributions may have caused an uptick in fees?

EDIT: an additional question relates to the definition of a contributor - is this any non-opted out circle member? Or perhaps more accurately, any circle member with a non-zero GIVE allocation?

I.e. if a marketing circle contains 7 members, but only 4 are allocated give (3 opted out, one didn't opt out but didn't receive an allocation from peers due to being on vacation for the epoch), the budget is 18k AST (4 x 4,500) + fee proportion?

Final alternative is that there could be a threshold of GIVE received (e.g. >10) to count as a contributor.

[agriimony]

Really well thought through proposal.

Can you clarify the smoothing comment? Do you mean that bonus funds may be back-allocated to previous epochs based on the fact that past contributions may have caused an uptick in fees?

Not exactly back allocated, but rather that the GIVE allocations in Coordinape would be distributed over 3 months.

E.g. If you received 100 GIVE tokens this cycle, it would be split evenly (33/33/33) over this cycle and the next 2 cycles. This means that even if you didn't do any work in the next few cycles, you would still have some allocations from the current cycle which would allow you to be rewarded with a part of the bonus pool if the fees grow over the next 2 months.

EDIT: an additional question relates to the definition of a contributor - is this any non-opted out circle member? Or perhaps more accurately, any circle member with a non-zero GIVE allocation?

I.e. if a marketing circle contains 7 members, but only 4 are allocated give (3 opted out, one didn't opt out but didn't receive an allocation from peers due to being on vacation for the epoch), the budget is 18k AST (4 x 4,500) + fee proportion?

Final alternative is that there could be a threshold of GIVE received (e.g. >10) to count as a contributor.

Good thoughts. Currently, I'm counting this as any non-opted out member of the circle - but I guess we could include a provision that they would need to exceed some threshold? Although this may lead to some weird game theoretical allocations, where you end up earning more by splitting your allocations among multiple recipients just to increase the number of "contributors"

[gpxl-dev]

E.g. If you received 100 GIVE tokens this cycle, it would be split evenly (33/33/33) over this cycle and the next 2 cycles. This means that even if you didn't do any work in the next few cycles, you would still have some allocations from the current cycle which would allow you to be rewarded with a part of the bonus pool if the fees grow over the next 2 months.

How does that work for the first and second cycle using this method?

[agriimony]

E.g. If you received 100 GIVE tokens this cycle, it would be split evenly (33/33/33) over this cycle and the next 2 cycles. This means that even if you didn't do any work in the next few cycles, you would still have some allocations from the current cycle which would allow you to be rewarded with a part of the bonus pool if the fees grow over the next 2 months.

How does that work for the first and second cycle using this method?

New contributors would get less allocations from their first and second cycle since their points would be smoothed over the next 3 months.

Example below over a 3 month period.

Allocated GIVE	1	2	3
A	100	100	100
B	0	200	200
C	200	0	0

Smoothed Points	1	2	3
A	33.33	66.67	100.00
B	0.00	66.67	133.33
C	66.67	66.67	66.67

% Allocated	1	2	3
A	33.3%	33.3%	33.3%
B	0.00	33.3%	44.4%
C	66.7%	33.3%	22.2%

[Koploseus]

Does the AST rewards is fixed ? I mean if the price / goes down, the allocation will stay the same?

Should it be more interesting to not buy back but only to "increase" the point allocation ? With the buy back airswap will have to pay such fees to perform it.

[agriimony]

Does the AST rewards is fixed ? I mean if the price / goes down, the allocation will stay the same?

Good question. We had that asked a few times whether or not to link to some fixed USD allocation. IMO this is ideal to have, but adds a certain level of complexity. e.g. image a scenario where AST price pumps / dumps just when its about to allocate, what would be the "correct" price to use?

Should it be more interesting to not buy back but only to "increase" the point allocation ? With the buy back airswap will have to pay such fees to perform it.

Not sure I understand the increasing point allocation part. With AIP #26 the token buy backs are paid for by the community and incentivised by them earning 1% of the consolidated (bought-back) token pool.

[VWorkerFirst]

The idea is great! (Like all Aaron's ideas:) My only advice is to start only from Circles funding and state Treasury refund later (in few months) to make the impact on the fee pool more smooth.

[agriimony]

Thanks! Yeah I lowered the treasury amount so that the staking reward is still kept at 80% to ease it in. I'd like to keep a small amount for the treasury so that people know it's there. That would make it easier to make any changes via a configuration vote in the future.

[agriimony]

The idea is great! (Like all Aaron's ideas:) My only advice is to start only from Circles funding and state Treasury refund later (in few months) to make the impact on the fee pool more smooth.

Don just reminded me that conversion to AST is probably still not ready yet, so will follow your advice and just provide Circles funding first. When AST conversion is in place, we could propose a Treasury buyback (or as greypixel suggested, even a token burn mechanism)

[agriimony]

removed the budget caps since we are regularly reviewing the amounts anyway

[agriimony]

removed coordinape smoothing as would add too many complications

[Junkshot1]

Record keeping:

Current review of sustainability on AIP 47. Oct 21, 2021. Previous epoch complete as of Oct 20th, with allocations of AST given.

Allocations of various branches, (Development, Ambassadors, Governance) all appropriated within reason on current epoch.

An approximation of 100k AST alotted was completed, and within the range envisioned by current members. Those participants who opted in, were alotted amounts. Opted out were noted.

As also noted the ability to engage and distribute was smooth, and provided simplicity, allowing focus on other more pressing issues.

Current funding scheme allows for transparency and also plays a role in community development, while fostering relationships.