Temperature Check - How should HOP compensate Multi-Sig Signers

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

Simple Summary

This is a temp check to conitnue the discussion surrounding Multi-Sig Signer’s compensation with community feedback incorporated.

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 to @dybsy who contributed the most during this retroactive period. @dybsy took on the day-to-day administration of the two multi-sigs which included doing the following:

  • Learn how multi-sig technology works
  • 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 completely in HOP.

Subsequent Retroactive Payments

Subsequently, I propose that whoever takes on the day-to-day administration of the multi-sigs 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.

The most active Multi-Sig signer who administers the multi-sig day to day will be paid 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 completely in HOP.

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 with term limits and opening up the multi-sig signer roles up to the entire community through a nomination process and an election.
  • Possibly incorporating vesting schedules to further align compensated role holders contributing to the Hop Protocol.
4 Likes

I’m currently abstaining from this vote (and my change my vote to no) as I think it needs more discussion and should also be coupled with some things discussed in the original RFC like setting how multi-sig signers are nominated, replaced, voted-in, etc. Namely, I think setting up nominations and an election (maybe every 6 months, coinciding with payments) is critical if signers are being compensated. I do think signers should be compensated (specifically in HOP), even if just to align incentives between the DAO and the signers, but I still feel that this is a large expense all things considered.

1 Like

Here is the Snapshot link. Please also edit the original post to include it somewhere.

Anyone who holds or is delegated HOP, please consider voting.

Thank you for the feedback, it is appreciated.

I believe that electoral processes for compensated roles should be separate discussions, so that the initial discussion around whether compensation is justified is streamlined to relevant facts relating to compensation in the first place…
If the community decides to compensate multi-sig signers in the first place, then we can proceed to quickly work on a proposal regarding how they are elected while including the other conversations such as a vesting schedule for compensated roles, I included these considerations in the Temp Check.

By putting the entire electoral process into an initial discussion regarding compensation, the conversation is less streamlined and the most important information may be lost to the reader.

1 Like

The discussion of compensation is directly related to who is taking on the role, how they’re elected to take on the role, and for how long they’re in the role. The discussion can be streamlined on the multisig process in its totality–it’s not difficult to have a conversation including who should be a signer and whether they get paid. A multisig proposal should have all of these considerations. As I reason this out more, it’s clear to me that we can add more to this proposal so I am switching from abstaining to voting no.

Hi! Thanks for putting the snapshot together.
Though I am aligned with compensation, I voted No for the reasons I shared here (i.e. compensation tied to a proxy of the effort/cost, metrics of work being done, and a review of compensating learning curve), as well as in alignment with the reasons expressed by @fourpoops in this thread:

Hey thanks for the proposal. Regarding the retroactive payments shouldn’t they be also mirrored on the plan for future compensation of multisig signers? How long has it been open?Has it been a year already?

What about gas rebates? The multisig signers eventually also execute the transactions and spend ETH in gas to do so.

1 Like

The Ethereum Multi-Sig has been open for 5 months while the Optimism Multi-Sig has been running for 4 months.

Could you expand more on what you mean by this statement?

There has been no explicit provision for gas rebates, I hoped to keep the budget for this as lean as possible, therefore it is expected that signers would replenish the ETH spent on gas with their compensation.

Thank you for the reply and I understand and respect your decision, your feedback has also been noted.

1 Like

I understand and respect your decision, your feedback has also been noted.

1 Like

Ah yes. So what I mean is that if you already set out a set of rules for payments per month for the multisig, I would expect any retroactive payments to just follow those rules backwards too.

There has been no explicit provision for gas rebates, I hoped to keep the budget for this as lean as possible, therefore it is expected that signers would replenish the ETH spent on gas with their compensation.

I get it. I think that gas rebates would be absolutely stellar (as someone who also has been in other multisigs) and I would love to vote for it. Having gas rebates eat on the compensation is unfair and sort of shoots oneself in the foot so to say.

It creates incentives for signers to try and save as much gas as possible which may end up slowing down transactions. They should not have to have smaller compensation just because the DAO needs 3-4t transactions during congested times. Does my reasoning make sense?

In general I am in favor of paying multisig signers. Would just like to figure out the details.

2 Likes

I am going to vote abstain since there has been no response and my whole family and I are pretty sick so I may be unable to check again before the deadline.

I would be open to changing to YES due to what I stated in the above post but need my questions addressed.

I apologize for the late reply.

I see your point and I agree, the primary purpose of this proposal is to justify a basis for their payment in the first place, if this vote passes I will be sure to make sure that the rules for retroactive payments and subsea payments are identical.
I also see the point you made in relation to gas rebates, I will be sure to see that implemented subsequently.

1 Like

All right thanks. So after your post and the chat we had in discord I am changing my vote to yes.

I do want multisig signers to get compensated. I just want the terms to be clear and fair both for past and present and also consider gas rebates.

Since, from what I understand after our chat, this is not the vote that will decide on the specifics, but just a vote about whether to do it or not I am voting yes.

This has passed with 94% approval, and is eligible to be pushed to an on-chain vote. Thank you to everyone who participated.

1 Like

Is this actually the case? If there are no specifics being decided, what is the point of this proposal? As far as I can understand there are quite some specifics being decided, but not enough in my opinion and they haven’t been sufficiently discussed. Related again to my concerns regarding this proposal, if no specifics are being decided in this then why don’t we put together a more comprehensive proposal including gas rebates, term limits, voting, etc. to fully govern the multisig?

This has moved to an on-chain vote as HIP 12. If you hold HOP, please consider expressing your opinion by voting.

I downvoted this on-chain vote since as far as I have been lead to understand from my conversations with @Kene_StableNode this was just a temp check vote to see if we should compensate multisig signers.

It was not supposed to proceed for an on-chain vote and be executed as is.

As I said I agree with compensating multisig signers. But there is open questions as to how this should be done, gas rebates, retro-payments being equal or at least close to future compensation etc.

@Kene_StableNode can you clarify if that was your intention?

The primary purpose of HIP 12 was to address the fundamental question of whether we should compensate Multi-Sig Signers in the first place.
As I told you, I planned to follow up with another proposal which would address the there considerations and operational details that need to be ironed out, the purpose of this proposal was to start up the conversation and then follow up with a subsequent proposal that irons out the rest of the details such as:

Elections and Term Limits
Gas Rebates
Possible Vesting of Tokens etc.

It is my intention to finalize this with an On-Chain vote and move onto a discussion that solely discusses the details that have not reached consensus.