Soulbound Salaries & Impact Stocks
By Noah Yeh
da0 started as an idea to bring Funding the Commons to Taiwan, then quickly became so much more. The community has gained momentum and more people have hopped in, brainstormed ideas and proposed projects. It’s quite fascinating.
What keeps me awake at night isn’t how to keep the momentum going. We know it would go up and down despite our best efforts. This is just something we need to learn to live with. What I do care about is how da0 might be able to say “Thank You!” in a better way, to reward meaningful contributions, and to keep things going even when the momentum is at a low point.
Thus, we’ve been discussing ways to incentivize contributors in the space of public goods/commons for the past couple of months. At this point, we have made some strides even though of course there is always much room to improve. Here are some of my thoughts and assumptions.
The Old Private
The way the old world incentivizes people is what we are all familiar with: salaries and stocks. It’s how Ancient Rome incentivizes its soldiers; it’s also the way to go since the Dutch East India Company. Capitalism thrives under this system, motivates individuals to put their lives into profit making machines. It has been the case for thousands of years. And obviously, we’ve built some amazing stuffs.
This brings us to a conundrum. Since money is the agreed upon measure of success, and almost all incentives are translated into monetary terms, it leaves no room for projects or entities that create values but don’t do a good job of capturing value and then turning it into profit. This is basically the fundamental dilemma of public goods and the commons: Good for all, but no one pays.
The New Public
Let us be honest: The space of public goods is most likely not the preferred career choice for talented graduates from Stanford or other world-leading universities. The organizations in this sphere usually don’t make or pay good enough money. But this is also why we very often don’t have enough people and resource to try to fix our socio-economic or environmental problems, be it the refugee struggles or the climate change, and much much more.
The old ways have lasted so long. Now is possibly a good time for us to revisit the system. It is unlikely that these public goods would ever match up to the kind of money Google or Meta is making. Given this reality, how might we bring more contributions to the space that everyone should pay more attentions to?
Here’s our proposed solution, which is composed of 2 key elements:
- Soulbound tokens as salaries
- Hypercerts as stocks
In case you don’t yet know what these are, here are some brief introductions:“Soulbound” by Vitalik Buterin
“Hypercerts: A new primitive for public goods funding” by Holke Brammer
Soulbound Tokens as Salaries
We often forget that currencies are simply accounting tools. Instead, we often see them as our ultimate goals. Since tokens and NFTs bring intangible assets to light, is there any motivation behind currencies we can bring forth to incentivize contributions?
SBTs (Soulbound Tokens) doesn’t bring financial returns, but it does bring trust. One can consider SBT tokens to be certificates or endorsements. With credible sources, the trust we build can be very valuable.
Enough trust builds up reputation, and reputation often brings more people and resources together. Imagining everyone working at Google gets non-transferable tokens from her boss, colleagues or even clients and partners whenever they make meaningful contributions to a certain task. When she later wants to find a new job or do a side project with someone, the accumulated tokens/scores compared with other Googlers could become a much stronger reference than a few lines of experience starting with “Google” on the resume that really doesn’t say much.
Considering these scores/tokens are basically public information on blockchain (to simplify we don’t take privacy into consideration in this article), reputation doesn’t have to be its only use case — Anyone can build utilities on top of it for this community of contributors. Here are a couple of examples when I let my imagination go wild:
- Airdrops of hypercerts based on contribution scores
- Added weights for quadratic funding rounds
- Badder ass characters as PFPs
- Higher attacks in community games
- Discounts at bars that care about the same mission
The more utilities come to this reputation, the stronger the network effect is, and the more valuable this reputation would be.
As mentioned, the space of public goods mostly creates value, not profits, hence trust and reputation is also something we seek in life. We need to be creative when it comes to this new form of incentive design.
Hypercerts as Stocks
Hypercerts is a new form of impact certification created by Protocol Labs. This follows a very different logic than SBT as salaries. Instead of looking for new motivation and incentives, we assume it is still possible to infuse monetary incentive into the circulation of public goods.
Hypercerts assume that a secondary market for impact certificates is possible. Governments, foundations, corporations that care about a certain cause (or regualtion) may want to buy the certificates of positive impact from the market, much like buying carbon credits. The other possibility is people might just feel like collecting impact like art. Of course, Hypercerts can come with certain rights too.
This builds a market for speculation, not necessarily speculation from the traders (at least not in the beginning, they have way too many other options), but from individuals or organizations who contribute time, labor, money, or resource of any kind. This speculation might convert more to help with the cause.
da0 has formed a partnership with Protocol Labs to experiment with Hypercerts, and we’re also looking for help.
As hypercerts has always been described as a form of equity, this brings us to the next discussion.
Now that we have SBTs and Hypercerts to replace salaries and stocks under this public goods/commons context, if I were the head of a human resource department, I would probably start to strategize around compensation packages.
We can possibly design a compensation package based on:
- How other organizations are crediting for the same task
- Consider the reputation of the organization, if the potential value of Hypercerts is based on potential impact, then there should be higher expected returns for more reputable organizations, this can be a tradeoff with SBT compensations.
- Consider the other opportunities the organization can provide to contributors, would working with UN be valuable for the individual?
Total rewards is another phrase that’s often used in the space of HR. Other than compensation, a lot more can be considered:
- Is this a chance for the contributor to become an opinion leader in a specific field?
- Are there other public rewards of accomplishments?
- How much does this mission, cause resonate with the individual?
- Does one find self-altruism balance? Is one making enough money else where to support its livelihood?
- Flexibility of work time and location
Expecting people to contribute for a long term without being paid is unrealistic. Only very few has the passion and context for themselves to do so. Hence, caring for the need of contributors’ lives is important. Yet, according to Maslow’s laws, life’s pursuit could and should be more than just survival.
Building A Thriving Public Goods Space
For an industry to thrive, talents need to be in place, and more talents need to want to come. We shall commence by building a clear and meaningful incentive system, possibly with SBTs and Hypercerts. If these experiments are successful, more will come, more will collaborate, and I will be able to sleep better at nights.
If you’re interested, please join us at da0, we live on Slack for now.
DISCLAIMER: The views and opinions are expressed as solely those of the author that does not necessarily reflect those of the da0 community.
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