[Request for comment] How should HOP compensate Multi-Sig Signers

🐰Hop Ecosystem
1 

Authors: @Kene_StableNode & @Bobbay 
Contributors: N/A
Status: RFC
Date Posted: 2022-11-22

Simple Summary

This is a temp check to initiate a discussion surrounding Multi-Sig Signer’s compensation.

Abstract

Multi-Sig signers have solidified themselves as a vital part of the Hop Protocol’s operations, although Multi-Sig signers participate in varying degrees, this temp check is geared towards rewarding each multi-sig signer adequately at their various points of participation.

Motivation

As a way to reward multi-sig signers while building a culture that incentivizes prompt participation from signers, this initiative will help ensure that the Hop multi-sig operators stay motivated to carry out their duties whenever called upon.

Specification

Initial Retroactive Payment

There are currently five Multi-Sig Signers, I am proposing that the multi-sig signers are compensated retroactively, starting with a retroactive payment as a reward for work previously done.

There are currently two Hop Protocol multi-sigs, one for Ethereum Mainnet and one for Optimism, the Mainnet Multi-Sig was has been operating for five months starting from June, while the Optimism multi-sig has been operational for 4 months, starting from July.

For the initial retroactive payment I propose a one-time payment of $2,000 for the Multi-Sig Lead signer, this refers to the individual who takes the time to do the following:

  • Learn how multi-sig technology works
  • Took on the day-to-day administration of the multi-sig
  • Figured out troubleshooting
  • Worked on merkle tree verification
  • Confirmation of multiple variables
  • Worked daily to avoid the compromise of the multi-sig

For other multi-sig signers (four individuals specifically) I recommend a one-time payment of $1,000 per signer, the difference in payment for the lead multi-sig signer and other signers is justified by the day-to-day involvement of the lead multi-sig signer.

Total Cost = $2,000 + ($1,000 x 4) = $8,000

This initial retroactive payment will be paid out in HOP and USDC with a split of 70% Hop and 30% USDC.

Subsequent Retroactive Payments

Subsequently, I propose that the lead multi-sig signer should be compensated $500 a month for efforts related to administering the multi-sig, while other multi-sig members should be compensated $250 monthly, these payments would be made twice a year at 6-month intervals, for example: If the first subsequent retroactive payment would be made in June 2023, while the second payment would be made in December 2023.

For the lead multi-sig signer this would be a $3,000 payment twice a year, which is an annual salary of $6,000.

On the other hand, each of the other multi-sig signers would be paid $1,500 twice a year, which is an annual salary of $3,000 per multi-sig signer.

Annual Total Cost = $6,000 + ($3,000 x 4) = $18,000

These subsequent retroactive payments will be paid out in HOP and USDC with a split of 70% Hop and 30% USDC.

General Total Cost = (Inital Payment + Subsequent Payment)

$18,000 + $8,000 = $26,000

Rationale

It is important for multi-sig signers to be adequately compensated based on the level of time commitment and effort they put in to ensure the day-to-day running of the HOP Protocol, this has been reflected in the distinction in payments for the lead multi-sig signer and other signers.

Considerations

  • Formalizing the multi-sig signer roles and opening up the multi-sig signer roles up to the entire community through a nomination process and an election.
3 Likes
2

Where would the USDC be sourced from? If it is simply from selling HOP, perhaps it’s easier to just let the signers have the HOP and decide for themselves if they want to swap for USDC.

Very glad to see someone start this conversation! Our first question is a bit in the weeds, but it’s clear the msig needs nonzero compensation.

1 Like
4

I see your point, considering that the protocol does not currently hold any USDC, it makes sense for Multi-Sig Signers to be compensated in HOP.

5

Can we have some multi-sig signers weigh in here on how much time is actually spent per month on multi-sig duties and what the role really entails? @dybsy @david-mihal

And while waiting for some of that information, I still would add some comments to the initial proposal. First, I do think HOP should compensate multi-sig signers in some fashion and I like the idea of having nominations and an election (maybe every 6 months, coinciding with payments).

Second, I think the “lead multi-sig” signer needs to be better defined–is it even needed? I do think that a retroactive lead multisig signer is clear here (whoever set everything up). As you’ve laid it out, I don’t believe most of these tasks are all that significant and I’m confused by most of your bullets (my comments/questions in bold)

Third, I agree with @GFXlabs that payments should sent in HOP and signers can do whatever they want with it if they want to swap for USDC. I do like the idea of marking to market the $HOP payments in USD terms at the date/time of payment though.

1 Like
6

Hey poops,

Most of Kene’s information came from DMs with me (which I suggested here should be public for everyone’s benefit: Discord). He reached out to me following the community call.

Here is a transcript of the DM:

  1. keneeze.eth — 11/17/2022 6:02 AM

  2. [6:02 AM]

Hello

  1. [6:02 AM]

I’m Kene

  1. [6:02 AM]

I spoke on the Hop Community Call yesterday

  1. [6:02 AM]

I should have followed up earlier

  1. [6:03 AM]

I wanted to ask you a couple of questions about being a Multi-Sig Signer for Hop

dybsy — 11/17/2022 6:51 AM

Hey there

keneeze.eth — 11/17/2022 7:59 AM

Hello

  1. keneeze.eth

I wanted to ask you a couple of questions about being a Multi-Sig Signer for Hop

keneeze.eth — 11/17/2022 8:00 AM

Just reaching out regarding this

dybsy — 11/17/2022 8:04 AM

I see that

keneeze.eth — 11/17/2022 8:24 AM

I’m coming up a proposal for Multi-Sig Compensation and I wanted to get a slowed down version of what you said yesterday.

  1. [8:24 AM]

If you don’t mind

dybsy — 11/17/2022 8:26 AM

Do you have specific questions? I’m sure sure I can reproduce what I said off the cuff.

  1. [8:27 AM]

I know I talked about initial start up, learning the tech and how to use it, administration, troubleshooting, verification and confirmation of multiple variables, and liability.

keneeze.eth — 11/17/2022 8:32 AM

Yes

  1. dybsy

I know I talked about initial start up, learning the tech and how to use it, administration, troubleshooting, verification and confirmation of multiple variables, and liability.

keneeze.eth — 11/17/2022 8:32 AM

This is helpful

  1. dybsy

I know I talked about initial start up, learning the tech and how to use it, administration, troubleshooting, verification and confirmation of multiple variables, and liability.

keneeze.eth — 11/17/2022 8:33 AM

This is basically what I wanted

  1. dybsy

I know I talked about initial start up, learning the tech and how to use it, administration, troubleshooting, verification and confirmation of multiple variables, and liability.

keneeze.eth — 11/17/2022 8:34 AM

The person who performs this takes up the bulk of tasks and the rest are often casual signers. Right? (edited)

dybsy — 11/17/2022 8:34 AM

In my experience, yes.

  1. [8:34 AM]

Casual is probably not the right word

  1. dybsy

Casual is probably not the right word

keneeze.eth — 11/17/2022 8:34 AM

Yeah that may be a bit harsh

dybsy — 11/17/2022 8:34 AM

They still must be informed of what is being signed and why, and confirm before signing.

keneeze.eth — 11/17/2022 8:34 AM

They basically just sign off on transactions

dybsy — 11/17/2022 8:34 AM

But the initialisation takes more effort for sure

  1. [8:34 AM]

Yeah

  1. dybsy

But the initialisation takes more effort for sure

keneeze.eth — 11/17/2022 8:35 AM

Thank you

  1. [8:35 AM]

This has been really helpful

dybsy — 11/17/2022 8:35 AM

Happy to help as needed

  1. [8:36 AM]

Add communications with the team in the general list

  1. [8:36 AM]

I am almost constantly in contact

  1. dybsy

I am almost constantly in contact

keneeze.eth — 11/17/2022 8:47 AM

Duly noted

November 18, 2022

keneeze.eth — 11/18/2022 8:24 AM

Hello

  1. [8:24 AM]

One more question

  1. [8:24 AM]

How many multi-sig signers are there?

dybsy — 11/18/2022 8:52 AM

5

keneeze.eth — 11/18/2022 8:53 AM

Okay, thank you

November 21, 2022

keneeze.eth — 11/21/2022 11:27 AM

Sorry for all the questions

  1. [11:28 AM]

Could you estimate how many times transactions are signed on a daily and weekly basis?

  1. [11:28 AM]

Also how long have the Multi-Sig Signers been operating?

dybsy — 11/21/2022 11:47 AM

The Mainnet multisig was rolled out in June, and there has been limited transactions: https://etherscan.io/address/0x60224984338dede521c56dee7a09e446a5a163f4 The Optimism multisig was rolled out in July, and has had much more activity: https://optimistic.etherscan.io/address/0xC988107688b750dee6237B85A3ca49ba0a65DaB0 There is no estimate on transactions, because they occur when they are needed. $OP rewards should be pushed weekly but sometimes take longer.

Ethereum (ETH) Blockchain Explorer

GnosisSafeProxy | Address 0x60224984338dede521c56dee7a09e446a5a163f…

The Contract Address 0x60224984338dede521c56dee7a09e446a5a163f4 page allows users to view the source code, transactions, balances, and analytics for the contract address. Users can also interact and make transactions to the contract directly on Etherscan.

Image

Optimistic Ethereum L2 Explorer

Contract Address 0xC988107688b750dee6237B85A3ca49ba0a65DaB0 | Optimism

The Contract Address 0xC988107688b750dee6237B85A3ca49ba0a65DaB0 page allows users to view the source code, transactions, balances, and analytics for the contract address. Users can also interact and make transactions to the contract directly on Optimism.

  1. [11:48 AM]

keneeze.eth — 11/21/2022 11:48 AM

Thank you

dybsy — 11/21/2022 11:48 AM

  1. [11:49 AM]

the actual transactions aren’t the measure of the activity. there is a lot that goes on in the background in order to get to a place where a transaction can occur. (edited)

  1. dybsy

the actual transactions aren’t the measure of the activity. there is a lot that goes on in the background in order to get to a place where a transaction can occur. (edited)

keneeze.eth — 11/21/2022 11:49 AM

Yes I understand that, the background activity is the administration that you do

dybsy — 11/21/2022 11:51 AM

for example, the custom app added to the gnosis safe to pull merkle root call data is a pain in the ass, and i have to play with it for awhile before it will even push the verified transaction (after i have spent hours, sometimes days, trying to verify the merkle root).

  1. [11:53 AM]

example: the Oct 28 root was published on the forum. it took until Oct 31 to verify, which involved lots of tech trouble shooting and interfacing with the team.

  1. [11:54 AM]

i will stress that the workload/time is not onerous - it is the associated responsibility and accountability.

keneeze.eth — 11/21/2022 2:12 PM

Thank you

  1. [2:12 PM]

Do you or any of the other multi-sig signers hold any other compensated role at Hop?

dybsy — 11/21/2022 2:13 PM

i’m a delegate, so i guess that counts as i can claim delegate compensation. but other than that, no. i think the other MS are also delegates.

keneeze.eth — 11/21/2022 2:14 PM

Thank you

November 23, 2022

keneeze.eth — 11/23/2022 11:38 AM

Heyyy dybsy

  1. [11:38 AM]

Could I get the wallet addresses of the five multi-sig signers

  1. [11:38 AM]

I already have yours

  1. [11:39 AM]

dybsy.eth

  1. [11:39 AM]

Could I get the other 4?

dybsy — 11/23/2022 11:39 AM

Yeah, after the game

  1. [11:39 AM]

They should be visible in gnosis but I’ll confirm later

  1. @dybsy

Yeah, after the game

keneeze.eth — 11/23/2022 11:40 AM

Sure thing

  1. [11:40 AM]

Thank you

  1. dybsy

Yeah, after the game

keneeze.eth — 11/23/2022 2:37 PM

Is the game done yet?

dybsy — 11/23/2022 2:38 PM

David Mihal eth:0x8F73bE66CA8c79382f72139be03746343Bf5Faa0 Hamzah eth:0xc156C57231a9302D9f5C7b5eF22871cC25F40736 Mentor eth:0x7DBF6820D32cFBd5D656bf9BFf0deF229B37cF0E L2Beat eth:0x28F569cC6C29D804A1720edC16bF1eBab2eA35B4 Dybsy eth:0x9A048A7BF38306c055C05606A6010C78CFc7C1E8

keneeze.eth — 11/23/2022 2:39 PM

Thank you

I recently posted in #governance (Discord) with an example of what sort of diligence the MS goes through for any given task. In this example, verifying the batch recipients of significant $HOP rewards via multiple sources to ensure what is being pushed out of the MS is accurate.

As you see in my chat, I stress the time commitment as not onerous, and it is the responsibility/accountability is what should be considered. There is no hourly expectation, but there is a need to be effectively “on call” when the team pops up with some sort of request with respect to the multi-sig, and what must occur to make that happen (often within a time constraint) varies based on multiple variables.

For instance, after pulling a new update into docker, the merkle root will still often be inconsistent with the automatic push (either the root itself, or the timestamps, or the amounts to distribute). This involves trial and error, essentially, by repulling and rerunning the root over and over—while the team works in the backend to fix things—until it is ready to go. Sometimes it has taken days to get right, someone times not. Again, it’s not onerous, or too time-intensive, but neither is it something that can be initialized and run without thought and attention. Once the root is verified, then the push can happen via the custom Gnosis app, which is itself a pain. I can’t speak for what the other signers do to verify, because I’ve not been in their shoes yet, given that I am doing the initializing.

Another example of MS activity that is not time or effort-based was HIP-8. This was me as a MS operator refusing to push a vote for a VELO pool until there was some sort of established mandate for me to do it. That is a care/attention/critical thinking aspect and not a logistical or technical aspect. When you are essentially taking custody of millions of dollars, you need to be diligent about the process.

Which brings me back to the accountability and responsibility perspective of the function. I’m not trying to sing for my supper, but in the absence of anyone else speaking to what’s going on I feel I need to at least speak up with a little bit of insight. As with kene, I am happy to answer more specific questions.

With respect to the technical operations, it must be said that not everyone in this ecosystem is a coder. So, things like building a docker environment, establishing RPC endpoints with a personal API and using VSC, pulling docker images, running linux commands, and doing all these coder things in order to operate the MS effectively are all second nature to people native to the industry, but they are things I had to learn for this specific task. I got it now, so it’s not like I need to relearn everything ongoing, but getting up to speed initially was wild.

7

My personal view is that multi-sig signers should already be aligned with the mission and success of the DAO such that they don’t require direct compensation from the DAO for multi-sig participation. For example, if signers have a long-term financial interest in Hop, then they are already invested in its success and are incentivized to quickly sign appropriate transactions.

On a more pragmatic level, I understand the desire to provide reasonable compensation for the signers being on call at all times. Based on my knowledge of the effort required to be a signer, the amounts listed here seem like an appropriate upper bound. I agree with @GFXlabs that a HOP-only payment is ideal.

8

Thank you for this reply, I hope that with the reply from @dybsy you were clarified, your concerns have been clarified in the next phase of the proposal available here.

9

Thank you for this reply, while we may disagree on whether signers should be paid, we have added consideration for future purposes that may align compensated role holders who work for Hop, we could possibly explore vesting schedules for Hop tokens as a way to align compensated roles long term.

Your other feedback in relation to HOP-only payment has been included in the Temp Check.

10

Thanks for pulling this together and all the info provided.
I am aligned 100% with multisig signers being compensated for the responsibility and effort put into this role.
However, I think there should be more information on the effort required to be a lead multisig signer or a signer, as well as a clear set of metrics, before I can weight in the right amount. Specially if this is expressed in USD. Why is it 500 USD and not 300 USD or 800 USD? Why is it measured in USD and not HOP, as it is the case with delegates? I would also like to see vesting considered, e.g. linear vesting over 3 months or something, maybe even consider streaming if gas allows for it.
Additionally, having metrics is key from my perspective as it enables to:

  1. Ensure the community has tools to measure the results of what it is being compensated
  2. Have a measure of the cost/effort of what’s being compensated, and that incentives are aligned. E.g. amount of transactions that had to be signed, or funds that are being secured.

I understand there may have been a big knowledge gap or lack of clear understanding on how to setup the right environment to perform the role. But I am unsure the learning curve is something that should be compensated. That’s not typically the case in other roles.

1 Like
11

As a multisig signer, I’m supportive of this proposal, but will be abstaining due to the direct financial impact on myself.

I’ll also respond to some of @Sisyhpos’s questions

Why is it 500 USD and not 300 USD or 800 USD?

Ultimately, these numbers are just guesses based on the community’s assessment of value. If anything, I’d say they’re slightly low, definitely below what I would charge if I was doing this as a contract job, but I think it’s a fair starting point given that we’re all long-term aligned with the Hop vision.

Why is it measured in USD and not HOP, as it is the case with delegates? I would also like to see vesting considered

I’d be supportive of both denominating in HOP (potentially with some mechanism to re-price if HOP drops significantly), as well as vesting

3 Likes