New Compensation Structure for Stewards - ApeCoin Steward Vesting Proposal

Active Proposals AIP Ideas
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PROPOSAL NAME:

New Compensation Structure for Stewards - ApeCoin Steward Vesting Proposal

TEAM DESCRIPTION:

PROPOSAL DESCRIPTION:

Shift from Stewards having compensation fixed in USDT to Compensation have a larger component in APE fixed at the conversion rate on an annual basis, and vested overtime.

APE disbursements to Stewards will be vested on a linear 18 month schedule from the time of their appointment. There will be a 3 month cliff before they can claim. Also the vesting period is 6 months longer than their term to encourage long term DAO alignment.

This vesting will be implemented by using Hedgey Finance, which allows Stewards to access the full voting power of their allocated tokens up front, whilst ensuring that the monetary value of these tokens can only be accessed based on the vesting schedule.

All APE marked for steward compensation is first transferred to the respective working group as they are AIP grant recipients. The WG will create dedicated multi-sig wallet for Compensation vesting.

BENEFIT TO APECOIN ECOSYSTEM:

  • This will Better Align Stewards with ApeCoin Holders.
  • The goal is to have more voters, not more liquidations of APE.
  • If a steward is removed in the first 3 months they will forfeit the APE Governance Distributions, as they have not reached the Cliff for vesting.
  • Better candidates as the Budget for Stewards will be pre-approved for a 12 month basis (as long as the working group is not dissolved).

DEFINITIONS:

Hedgey Finance - Token infrastructure for onchain teams.

Vesting - Token vesting is a mechanism used in the cryptocurrency space that involves the gradual release of tokens to stakeholders, such as investors and team members, over a predetermined period. This process is designed to prevent immediate selling or trading of tokens, thereby promoting price stability and encouraging long-term commitment from all parties involved.

Lock up Period - Lock-up period in cryptocurrency refers to a predetermined timeframe during which tokens are restricted from being sold or transferred. This mechanism is commonly employed to stabilize token prices and prevent early investors or team members from flooding the market with their tokens immediately after issuance.

Cliff - Cliff vesting in cryptocurrency refers to a specific type of vesting schedule where tokens or assets are locked for a predetermined period, known as the “cliff,” during which no tokens are released to the beneficiaries.

Allow on-chain Governance - Access the full voting power of their allocated tokens up front, whilst ensuring that the monetary value of these tokens can only be accessed based on the vesting schedule.

Allow transfer of plans - Ability of users to shift or transfer their financial plans

STEPS TO IMPLEMENT:

Stewards are currently compensated 9k USDT per month. The amount is given in APE from their respective Working Groups. The amount is 9,000 x 12 = 108,000 USDT

The suggestion to change to 6k USDT per month and 50,000 APE.

Also suggest to increase the lead Stewards compensation to 6600 USDT and 60,000 APE (20% more than other Stewards).

Annual contract compensation

It includes a USD compensation and an APE Governance Distribution component.

Option A

Role USD APE
Lead Steward 79,200 60,000
Other Steward’s 72,000 50,000

Option B

Role USD APE
Lead Steward 79,200 72,000
Other Steward’s 72,000 60,000

The decision on Option A or B needs to be confirmed as Stewards are taking on more risk with this structure, so the compensation amount should also be discussed. Also, the current amount is not competitive relative to other leading DAOs. Finding the best win-win situation here is critical.

For example in ENS it is 4,000 USDC per month and 10,000 ENS per year (168,600 USD at time of writing), which is equal to 220,538 APE + 4000 USDC per month. Also more USDC for lead Stewards.

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Also, you can see the Banana Bill is also designed to have compensation with lock-up mechanics.

The APE price will be locked at the price on January 01 each year for Q4 election cycle and July 01 for Q2 Election cycle. At each election cycle the amount of APE will be re-adjusted for NEW Stewards based on XX USD amount. The current Stewards will have the amount remain locked for the 12 month period and readjusted if they are re-elected.

The Working Group Stewards cannot change their own compensation and these terms will only take effect after the next election.

The vesting contract will start of January 01 and July 01, depending on the election cycle.

How to handle current Stewards needs TBC. Should it start also for them after the snapshot passes on a pro-rata basis?

  1. Vesting via Hedgey.finance .which allows for delegated voting power. This means that tokens grant immediate voting power, which is the main goal of such grants.
  2. We will deposit 50,000 APE on a vesting contract for a normal steward and 60,000 for a lead Steward. The contracts will be unrevokable and transferable.
  3. The APE Tokens will be vested over a 18 month period to encourage long term decision making of Stewards.
Description Terms
Vesting YES
Lock up Period 18 months
Cliff 90 days
Allow on-chain Governance Y
Allow transfer of plans Y
Amount per Steward 50,000 APE
Amount per Lead Steward 60,000 APE

Related links

ENS Vesting Proposal

ENS Wallets

Blog Article showing a case study in ENS

REPORTING EXPECTATIONS:

The vesting schedule and amount given at each election cycle will be shared in the forum.

OVERALL COST:

This is a process proposal and 0 cost, as the Working Groups would need to include in their budget.

“Total amount requested from the ApeCoin Ecosystem Fund = $0”

  • The Working Group Budget for Steward Compensation will be approved for One Year in their respective Budget AIPs, but the USDC is paid in two tranches. The second tranche and 50% of the APE Governance Distribution component will not be included in the 250,000 USD limit requiring 69% approval.

  • If a Steward is removed or resigns from their position, they forfeit all future compensation and vesting.

  • If they complete their term, they receive the full amount, including the Long Tail Vesting schedule.

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I think this is a great way to keep a fair increase for the Lead Stewards, who hold an elevated role.
Keeping a portion of the compensation in the ecosystem feels like a fair action as it it can motivate and keep Stewards invested in the overall growth and success of the Dao for 18 months and beyond.

I support moving forward with this.

3 Likes
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Is this proposal suggesting that stewards work for free until their payments are vested? If so, who would actually want to do that?

2 Likes
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Actually it would solve the current problem of stewards working with no guarantee of any payment.

They would have a base amount in USD, but for the first 90 days no ability to sell the APE component. The cliff after 90 days then they are able to sell what has accumulated in the first 90 days. The amount per month is spread over 18 months. So if 100k it would be 5555 (approx APE) per month.

Personally, I think the amount in APE should be more, as they have a risk component. However, I haven’t suggested an alternative amount yet.

Added this to make it clearer.

Why would a holder support an increase in APE allocation? If the price of APE drops it would mean the comps in USD terms is reduced. If the price of APE increases the Stewards will benefit more. This enhances the alignment between Stewards and holders.

If the value of APE increases, so does the Treasury in USD terms. Also, so does the fund value of Banana Bill in USD terms, which is fixed as 100 million APE.

1 Like
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Wait! Since when were stewards working without a guarantee of payment? Just because the payments are late - while they are in the positions - isn’t the same thing. Especially since they do get paid anyway - as per the voted positions. What am I missing?

This doesn’t solve anything. Not only that, it introduces a mechanic that is unfair and questionable.

This isn’t as mathematically sound as you think. Also, this should be an option for the stewards, not a forced mechanic.

There should be no circumstance whereby fiscal spending be tied to the value of a volatile asset like a token. Funny thing, my ACE team had this very same discussion whereby they were informed that due to the value of $ape (which had fallen dramatically in mid-Aug), that our $5M project had ballooned to about $8M. That’s not our fault. And is precisely the problem with milestone tranches based on the token value. If you ask for funds in $ape and plan for $100M, then by the time you get the funds that $100M is now $60M, you have a problem.

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If there is no AIP passed stating clearly an approved budget for stewards, they have no guarantee, as the working groups are AIP recipients not contractors like Special Council (directly to the DAO).

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Yes - I am aware of that. But that comes with the whole idea of a WG setting up their budget through which they get paid. I am not aware of a situation whereby a WG budget has failed to pass and thus them being non-functional. And to that end, your proposal doesn’t appear to remove this concept of having the WG setup a budget. Instead, all it does is to modify how they are paid after their budget (which is how they are paid) has passed.

2 Likes
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I believe this is awesome. Offering people a solid base salary plus what appears to be an effective variable component to incentivize results is exactly… well, just the right thing to do. However, I’m not quite sure why there’s a need for a 90-day lock-up period. Wouldn’t a 30-day period, like most companies use, be appealing and effective? Or is the longer period a part of the structure meant to encourage long-term decision-making? I’m not fully grasping that part. Overall though, this really is “how it should be”!

2 Likes
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90 Day Cliff

90 day, as if any no shows after an election they could be removed and they would forfeit the APE component (cliff not reached). 30 days is too short to see if a Steward is committed and capable. 90 days gives time to see performance, address if concerns and in the worst case scenario have them removed from the DAO.

Also at 90 days they start to get linear vesting and sell or do what they want with it.

Long Tail Vesting Strategy

There are various benefits:

  1. They don’t make decisions at the end of their term to try to make a short term pump.
  2. They also will remain connected to the DAO for 6 months if they leave the role. They may get involved with delegations, if they don’t have any other compensation, this long tail insures their compensation doesn’t suddenly drop to zero. As it is always uncertain if a Steward can achieve re-election.
  3. If a Steward gets re-elected they in effect will have more APE per month during the second term as the vesting periods will overlap.
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I guess that the main issue is never on the pay.

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Looks like a smart move to align Stewards’ interests with the long-term growth of ApeCoin, while reducing the risk of immediate liquidations.
The monetary value vested over time can attract stronger candidates who are genuinely invested in the future of the DAO.

We’ll be keeping our eyes on it & looking forward to further discussions!

1 Like
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Based on today’s $ape value that’s an increase of $17,000 pa for eight stewards (if we don’t add more working groups), $136,000 total.

This is an increase of $42,000 pa for four stewards, again, thats if we don’t increase the amount of working groups, totals of $168,000 increase.

This would mean all stewards will be paid more than special council (at todays $ape value), and considerable more as $ape price increases.

Also adopting a generic approach to all working groups like this is nonsensical as most are not even proven. Some have barely been “fully operational” for a few months. Many WGs will struggle to maintain relevance, and imo this will simply add to the community’s disapproval and rejection of their budgets.

I’m sure my feelings are not unique and I’ll be voting no to any increase to compensation for “salarybros”, especially when proposed in such a broad manor, which in fact is highly offensive considering how unproven most working groups, their stewards and leads are.

Thanks.

1 Like
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I have had no involvement with the conceptualization of this AIP — nor do I believe that any Steward from other Working Groups has.

It was brought up internally in the past and I did not support the idea.

AC

2 Likes
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I think you need to break down these points:

  1. APE price fluctuates and personally as a holder, not the biggest but over 100k APE, I want to see alignment with Stewards and holders. A token price can go up or down and I would personally like to see Stewards with an aligned upside but also a downside risk. Don’t forget APE dropped to 0.48 two months ago and now has increased to 0.77. (30% increase in the last month)
  2. Lead paid more is reasonable, other DAOs also pay the lead more. For disclaimer, I am not a WG Lead.
  3. As the WGs now take custody of the funds in APE as an AIP recipient. We now have to convert to USD, otherwise we can’t be sure we can cover the USD liability in the compensation structure. This AIP Idea reduces the need to sell APE for USD in the WGs.
  4. An decision to keep a WG is different to compensation discussion. If a WG is dissolved it won’t apply to that WG. Vote for WGs to dissolve is way ahead (with AIP number etc) than this idea.
  5. If the DAO wants to have WGs, then it needs to fund them correctly. If there is an issue with a specific Steward, again there is a process to have them removed as a Steward via a DAO wide vote.
1 Like
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@AllCityBAYC I have not listed you as an author on this AIP Idea.

Also for other readers, the idea for the lead having more benefit/reward is based on what other leading DAOs do and general business operations.

It might not be a popular AIP Idea among some Stewards, but I believe it is the right thing to do.

We will see what the DAO voters think is the best way.

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I understand what you are trying to achieve, and in fact within your AIP there are many parts I agree with.

Can I just ask how was the 100K/120K $ape amounts were decided on, and maybe if this where to be reduced, it wouldn’t be as hard to swallow.

Tl;dr - I may have been overly critical, as there are some very intellegent suggestions made imo.

2 Likes
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I think it’s important to know:

  • What are the defined responsibilities for the roles?
  • How are we measuring success for someone in these roles?

In my experience when a large portion of someone’s compensation is stock (which is the most apt comparison for something like $APE), that stock grant is either heavily or entirely dependent on performance.

I still struggle to understand how we define and then measure success for basically every role in the DAO. That’s not to say that people are not working hard. That’s not to say that people aren’t accomplishing great things. There’s just a serious lack of transparency.

2 Likes
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Me. I am that person. I would.

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Legendary AC! Can I ask what your objections are to it? I’m not sold completely on it, but there is a part of me that sees value in it.

I have never been a steward, so I do not know the current pay structure. But I like the idea of having full voting power of your $APE even if you have not been paid the full amount on it.

That sounds kind of cool.

Have we had issues with Stewards not making it past 3 months in the past?

Is the issue more about not getting paid for three months?

Isn’t this common with some of the new stewards who have to create budgets first?

FYI: I am not smart enough to understand most of this fully, but it seems like -maybe- a majority of the stewards are not on board with this, and there must be good reasons behind that.

Any chance you would be willing to share some insight?

Ok. As a member, solely - I have to say that it KILLS me to see two people who I have a tremendous amount of respect for clash on so many issues.

Part of me loves it. Ying and Yang and whatnot.

When @bigbull was campaigning, he had this crazy idea where if he had it his way, he would predetermine a set amount of $APE he would get paid at the end of his term.

If $APE hit $10 during his term, he would get to unlock all of his $APE. If $APE didn’t get to $10, he would get NOTHING!

This made me bullish on BigBull because of his bullishness on $APE and belief in himself and the team to get $APE to $10.

By the same $APE token I am super Bullish on @AllCityBAYC! This guy works his tail off day and night. Hate it or love it, he has a vision and he gets it done. Sees it all the way through. He’s really good about delegating, but not micro managing. He has tremendous insight and a wealth of knowledge about how the DAO works, anticipating issues, reading the room, managing different personalities, working with different groups, taking on projects, and is generally…fun. I thoroughly enjoyed working with him in the limited capacity I have had the opportunity to.

I feel like these two are Culture VS Capital. Both are necessary to put the DAO at the forefront.

But for the love of God and the DAO, if I had ONE SUPER POWER it would be to get these two great minds to see eye to eye on things.

Lastly, this isn’t to pit you two against each other. The opposite. I wish I could unite you two to be the ultimate force.

You both have all the best ingredients. If we could just get you to the table and compromise on how to cook, maaaaaan we would ALL EAT!

1 Like
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who decides if they are removed? what happens to that vacant seat? how long should it take to fill?