Guide Pay - September 2018 Renewal

Should we renew the current terms for Guide pay?

  • Discussion should be reopened with the intention of finding new terms

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  • Total voters
    21
  • Poll closed .
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#1
Nearly three months has elapsed since the last ANO vote on guide pay. The current period ends on 7th of September. That means that we need to start a discussion regarding renewal.

Last time around @MattO made a very positive contribution by organising the entire process from start to finish. That process took place over several votes, which lay the groundwork for our current system. My hope is that this time we can expedite the process by limiting ourselves to a single discussion followed by only one or two votes. However, if a number of contentious issues arise in this discussion, we can of course create a formal vote for each issue.

Things that we need to consider:
1. Should we renew guide pay?
2. How long should the next period last?
3. Should pay be denominated in FCT or USD?
4. How much should guides be paid?

Currently, guides are paid 600 FCT per month. That value was set whilst the USD value was significantly higher than it is now.

Guide pay is an important issue so I appreciate any time you take out of your schedule to contribute here.
 
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#4
I'm of the opinion that we keep the same arrangement for another three months. But would like to hear from Guides first before committing to that position.
I am in partial agreement with that. I think the main point of contention is how much guides should be paid, because the price in USD has fallen significantly since that was last agreed. I think everything else can remain as it is.

Essentially, if guides wanted to keep the same pay, then I would be okay with it. However, it is not something i could ask them to do, because right now they are being paid peanuts (in USD terms) for a fairly intensive role. With that in mind, I will have to move to increase their pay.

Last time around I also suggested that guide pay be denominated in Entry Credits rather than USD or FCT. The rationale was that we already have a price stability mechanism built into the protocol, so we can exploit that feature to create stable pay for guides. Essentially. we would determine their pay in EC, then use the FCT/EC exchange rate at the time of payout to determine the value of their payout in FCT.

I still like the idea, but I don't know if now is the right time to implement something like that. There is no precedent for it, so we would need to think very carefully about the implications and also the implementation details. Maintaining their pay in FCT would certainly be the path of least resistance, and may be the wise choice for now.
 
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#5
At the risk of being unpopular with my fellow Guides, I do not think that Guide pay should be raised above the current level. While 600 FCT at current prices is not a large sum of money, 600 FCT is a lot when compared to the amount in FCT most ANOs are bringing in on a monthly basis. The exception to this is if we end up following Paul's vision of Guides as protocol ambassadors with full time staff and offices. That's not my vision for Guides personally, and I think we can continue to do the job on a part time basis (with occasional peaks for critical events like ANO selection) and fund ourselves with day jobs. Canonical Ledgers plans to hold as much of its earned Guide FCT as possible at current prices. However, I recognize we may be in a different situation than other Guides who maybe have to liquidate their FCTs to cover lost revenue from reduced work hours at the day job, so I'm open to hearing counter-arguments.
 
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#6
Well I am of the opinion it should remain at 600 FCT, but not because of the hours. Because if I do the math compared to what I could make it is a joke. Thing is (and I know Quint has the same opinion), that we cannot reasonably ask for more since the guides already are getting quite a large share of the total FCT per month.

Just like Sam I don't have to liquidate, but that doesn't mean you should not see it as income. If I would not be a guide I would make more and could buy FCT of that ;) So I am lucky like Sam to be able to keep the FCT and hope for a higher price. But it would be bad to see the Guide remuneration as a speculative thing in general. It happens that some guides are in the position to do that.

I do however believe Paul's vision wouldn't be far of. I am already noticing we need to do so much stuff for the governance, that at some point choices will have to be made by some guides. I believe some guides in the future might be working more hours than others. For some it will be nearly a fulltime job, for others it won't

For instance I have been invited by Accenture (NL) and Microsoft (Zurich) to talk about Factom & Sphereon. These presentations will be mostly about Factom and of course a little Sphereon will be thrown in (these are Sphereon contacts). If I am going to do that more often as well as the existing stuff.......
 
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#7
I think it should remain at 600 FCT, but I want to frame it a bit differently than the guides above have, because I think it's important that we continue to work to properly define how our decentralized organization functions and how all the entities fit into it, as that will set a good precedent for the future.

I think that a direct comparison of Guide pay to an ANO's revenue can make us sort of loosely clump together entities in the Factom ecosystem that leads us lose some definition on how entities function in Factom. "The protocol" is ANOs and their revenue, everything else like grants and guides are expenses from the ANOs combined budget, and should be treated as such. That is why Guide pay being 600 FCT, roughly 25% of an ANO revenue (about 50% taking into account average ANO efficiency) at 15$ fct is reasonable, and why if FCT are 1k$ each, 15 FCT per month may be reasonable depending on the load on guides. This is because all of the upside and downside potential is and should be captured by ANOs, and we should strive to not transfer either the upside, or the downside, potential onto people resembling hired employees (guides) and hired contractors (grant recipients) of the Factom Protocol.

The following is a larger topic of discussion, but it is very connected with the question posed here, so I want to go into it a bit. I propose we look at this all more as a protocol-wide budget that we get to allocate. This is how normal organizations function and succeed, improper budgeting in an organization almost always leads to failure, and I see no fundamental reason why a decentralized organization is immune to needing to frame an overall budget of revenues and expenditures. We should decide how much money we want to spend on different activities within the ecosystem, and where the money will have the largest impact. These determinations should also be rebalanced in accordance with fluctuating FCT prices as certain expenditures are more necessary and have a higher impact with limited resources. Right now the ecosystem roughly has (unstated but implicit) budgets for running and securing the network (server costs) and providing network stability (server admins), which are quite a large % of our 73k FCT budget, but luckily those will probably be extremely sub-linear expenses as the price of FCT increases. We have that for marketing (pretty minimal right now), building open source tools (moderate), subsidizing development of products on top of the Factom protocol (moderate), etc. So for Guide pay, ANOs should assess what they want guides to do, decide if guides are the best entities to carry out that work, what value impact that work will have per $ spent, and decide how much capital to allocate to guides.

Guides jobs currently include ANO elections, managing certain aspects of the community, being the primary people to research and understand our governance system, handling the majority of governance processes, and over the upcoming few months, likely tackling the big issue of updating governance processes throughout the ecosystem, and renovating the governance documents as they are riddled with ... things that could be made better ;). Right now ANOs are allocating about 4% of the protocol's budget to this variety of governance processes (A total between the 5 Guides of 3k / 73K FCT, or 15k / 365k USD per month at current prices). I don't think this is a high enough overall budget for our governance processes while we are trying to create a truly revolutionary new governance system, and I think we should look for more opportunities to place our $ there to ensure we create a strong governance system.

All of the above being said, the Guides are really dedicated to what were doing here. Higher Guide pay may allow more time to be spent on governance processes and revamping docs, but speaking from an ANO perspective, right now (and without setting precedents for this) when money is tight (and I have pretty extensively ran the numbers on the grant pool, and bringing on new ANOs + raising Guide pay + ongoing grants would actually be a severe squeeze on the grant pool), I would use the fact that Guides are dedicated to getting this stuff done regardless, keep pay at 600 FCT, and work to find other higher impact places to put that Protocol budget.
 
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#8
Hi everyone,

I have reduced my workload at my dayjob With 20% to accomodate for my work done as a guide (still spend a lot more time than those 20% doing guide work though; but thats my own "spare time"); and I have to sell some of the FCT I receive to make up for my lower monthly Income. So far I have sold 50% of the tokens I have received.

I would also like to remind People that there are quite high business expenses also for a guide; so far setting up the Company has cost me around 4k EUR, and I pay 24% Company tax on the guide-renumeration, and an additional 28% when receiving dividends. Also accounting and audit-costs amounts to 3-4K a year - and the (damned) tax laywer I've been using isn't cheaper either.... So after doing the Math this is not a very lucrative position to hold at this price point.

But I also support continuing at 600 FCT/month for now, even if that is a reduction of around 60-70% in USD-terms; mainly due to the reasoning Niels mentioned above; 600 FCT x 5 is already taking up quite a bit of the protocol's monthly 73k Budget. Personally I think the guides receiving 4% of the protocols available Income is fair; and I think it should stay that that value for the forseable future even if the price drops another 50% - or goes back up again.

Julian is also stating many good and valid points above; and we do absolutely need to have a bigger discussion about this going forward. I hope we will be able to delve into that during the NeXT few weeks/months after putting this current applicant selection behind us.
 
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#9
Last time around I also suggested that guide pay be denominated in Entry Credits rather than USD or FCT. The rationale was that we already have a price stability mechanism built into the protocol, so we can exploit that feature to create stable pay for guides. Essentially. we would determine their pay in EC, then use the FCT/EC exchange rate at the time of payout to determine the value of their payout in FCT.
I think this is an excellent idea and highlights one of the greatest elements of the protocol. The guides commitment to the protocol has been outstanding and their humble answers in this thread is welcoming to read. On top of Alex’s suggestion above. I believe it would be worth considering having a monthly review of guide pay.
 
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#11
I think the work the Guides have done over the past three months has been well worth the cost, and it seems clear their role and importance is not going to diminish over the next three, so I am supportive of renewing their pay at their requested amount.

I'm not convinced that the Guide role should become a permanent protocol fixture as has been discussed in other threads. My concern is that Guides will be viewed as a point of centralization by the wider crypto community. But by the time Factom Governance is fully implemented with all Standing Parties and on-chain voting, I hope we'll be able to redefine their role in a way that takes away risk or appearance of centralization. For the purposes of this thread though, I want to be clear that I think Guides are still necessary and we should renew their pay at a fair rate.

This is my personal opinion. In general, I'll explicitly state if I'm speaking on behalf of Bedrock Solutions.
 
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#12
I am interested in Alex's suggestion, but pegging the guide pay to ECs does run the risk of emptying the grant pool if the price takes an 80-90% drop over the next 3 months. I am also concerned that pegging to pay to ECs separates the guides motivation from the ANOs and investors. The guides would be compensated with more FCT with a lower price (short term), while the rest of the network is compensated financially with a higher price.

I'm not suggesting the guides could *directly* do anything about the price (or would if they could), but I would like to see guides continue to be fully aligned with the ANOs by keeping the compensation in FCT.

My opinion is that 600 FCT per guide per month is fair at this time, but I would like to add a caveat that says if the price increases or decreases by some factor (suggesting "4 times higher" or "4 times lower i.e. 1/4" ) then we revisit the pay. With this agreement to revisit the pay in the case of excessive changes in price, the guides incomes are protected in case of a large price drop, and the grant pool outgoings can be reduced in the case of a large price increase. This protection for the guides is increasingly going to become relevant as they transition from hobby to part-time, and then to full-time guides (e.g. Quintilian). I don't want to lose any of our current guides!
 
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#14
I think that EC pegging is a very interesting solution, but one for which we should wait on until we can give guides reasonable salaries. Pegging to EC's would be all about the stability of pay, which is something that cannot be promised right now unless we want to risk eating greatly into the grant pool. On top of that, our point to peg at would need to be like $2,500 a month, so we would just need to readjust the peg if fct price recovered anyways.
 
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#15
We think that the guides do a great and important job so therefore agree that there should be a constructive review of guide rewards. We agree with the suggested 3 months as a minimum period, although reviews could be made at a frequency the guides establish. Because the protocol cannot guarantee a FCT to USD value then we are of the view that guides should benefit/suffer in the same way as the ANOs do by being rewarded in FCT (All in it together!). As such we consider that the 600 FCT rate should continue.
 
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#16
New ANO here. I read over the old discussions and it’s clear y’all have given this a lot of thought. But it seems like we’re just kicking the can down the road. Wouldn’t it make more sense to create a matrix of the possible scenarios and prescribe prices to each one (example below) so we don’t have to repeat this process every time the price of FCT goes wildly up or down?

I know if I was a Guide, I would want this level of transparency so I knew what I was signing up for and could plan accordingly.

Screen Shot 2018-08-29 at 12.43.06 AM.png
 
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#17
The Guides absolutely deserve more money - but as others are alluding to here, so does everyone. As we've seen with the Grants, placing renumeration at a fixed USD amount can decimate the grant pool with such a volatile market. I feel like this would be repeating a mistake at a fragile/transitional time.

We are all sacrificing our time which could be used for other paid work. Renumeration as a guide isn't just about money. The social/visual aspects of being a Guide could be argued to be priceless when it comes to politics, as is the privilege of having insider information regarding many facets of the protocol.

However, as Julian says, this is part of a bigger discussion for the future. Once we build up healthy funds in the pool with a recovering FCT price, we should be allocating rewards to every permanent position in the protocol.

With more resources these positions can grow and flourish to be of great benefit to the protocol.
 
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#18
@markthorsen @BennyJ
Don't want to be a dick here, but no way I would be a guide for these prices if it were fixed at these rates and I do hope we are not getting into a situation that I have to write down every second of a discussion the guides have. Guides have been chosen by the community for their diverse skill-sets. These skills are mostly found with people that also do rather well in other work life ;). Working on governance in a decentralized protocol is not something you have hundreds of people standing in line for. Last Guide election showed there aren't that many people that have the combination of skills, willing to put in the hours, and wanting to step forward. I believe the guides are mostly doing a good job (there are certainly areas we can improve upon).

Guide work is highly diverse in nature and it is also not like it is exactly X hours a day or something like that. Having the guides paid in FCT means our incentives are aligned. We have the review every X months by ANOs to make sure we are not completely out of line. A predefined max limit of 4 to kick of review also takes away alignment. We have seen a declining price for the last few months. If you look at the guide payout for first months, we have been working 50 hour weeks at the time for something like $1000 a month (the price a payout was something like 1/4). Same with last period (price is 1/3). Guide remuneration was being decided at 600 FCT at roughly $15 price. So yes we have done the work for months with constant falling prices and proven we are still here even for work way below minimum wage. I do not hope to see immediate discussions or questions when prices go up for 2 weeks for instance. Crypto is way too volatile for that. Also I believe the 600 FCT is currently okay, because of the total percentage that goes to guide as well as everybody in the system is suffering. The chance of it going up in next period I regard higher as it going down.

Yes this work is also partly because you believe in the project, but I have to balance at one point being a guide and doing other work. The guide work takes up a lot of time and certainly has transitioned from hobby to part-time the second we became guides. My external rate is $250,- and internal $ 150,-. As you can see these are quite far of what current remuneration at current prices is. If we stay at these types of prices I cannot extend guide hours vs other hours anymore, because my loss would start to become too big.

@BobbyEK Your post is spot on, except for the inside information part. That really is not the case. We are making governance mostly, we are not some secret shadow organization ;)

The above is my personal opinion and I will never say what exact amount of FCT/dollars I believe we should get, that is up to you guys ;)
 
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#19
@markthorsen thanks for the reply - and welcome as an ANO :)

I don't necessarily agree with such a matrix. Some of the reasons being:

- The guide role isn't really a "9-5" job where you "clock in and clock out" and get paid at a set rate as an employee. It's more akin to a board position where you are paid based on factors like experience/connections/responsibility/(legal exposure)/skillset/availability etc.
I'm not at all saying that "guides should be paid even when working just at few hours a week (guides have been working their ass off from day one, so currently that is not an issue). My point is that, as a principle, the guides' contribution to the Factom community should not (and can not) be measured in "hours worked", but;
- The guide contribution should measured in what the guides achieve for the community; and the renumeration should be defined as a percentage of the available monthly resources the protocol produce.
- Guide working hours are not consistent. After working around 50 hours a week for the first few months (initial ANO-selection, getting things off the ground) things went a bit slower (maybe 15-30 hours a week?) for a while until it ramped up again with the last ANO-election... Currently we are facing the need to work on governance/processes/legal which will also require a lot of work, so I don't see the weekly hours dropping much going forward.
- Hours worked are very "erratic"; due to our family- and day-job-commitments... We can't often work many hours in a row (which I actually do now; I took am extra day of unpaid leave to catch up on the forums/figuring out what processes we need to start working on), but do shorter stints of 1-2 hours (or even 5-30 minutes if something needs to be handled or coordinated right away)... If an employe (at least here in Norway) gets a call to work outside of working hours they get paid 2 hours minimum for taking the call outside of work hours due to the inconvenience. As a guide I have multiple instances of that every day. I did know this when I took on the role; and thats fine; but it also showcases that the guide-work is rather different than an ordinary job paid by the hour.
- Logging hours adds extra work and oversight; and again - much of what we do are done in shorter stints and the result should not be measured properly in "hours".
- Going for such a scheme based on a simple matrix with only two dimensions (price/time) are not encompassing all the criteria that should be taken into consideration in this situation.
- It misaligns the incentives between the protocol and the guides; at a fixed rate each month (pegged to USD) a guide doesn't need to care at all about the FCT-price; he/she gets paid nevertheless how well the protocol is doing...

Well, that was my input for now... Personally I think the way we are doing it now is fine; let the ANOs (and later the total standing party) decide what the guides should be paid with a quarterly review...
 
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#20
Based on the arguments I have heard so far, I am fairly convinced that simply renewing the current terms would be an appropriate course of action, so that is what I am throwing my support behind for now. I will review that position if I hear a good argument to the contrary.

Thank you to everyone who has contributed. I will remind others to get involved with discussion at the ANO meeting tomorrow.
 
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#21
The Guides absolutely deserve more money - but as others are alluding to here, so does everyone. As we've seen with the Grants, placing renumeration at a fixed USD amount can decimate the grant pool with such a volatile market. I feel like this would be repeating a mistake at a fragile/transitional time.

We are all sacrificing our time which could be used for other paid work. Renumeration as a guide isn't just about money. The social/visual aspects of being a Guide could be argued to be priceless when it comes to politics, as is the privilege of having insider information regarding many facets of the protocol.

However, as Julian says, this is part of a bigger discussion for the future. Once we build up healthy funds in the pool with a recovering FCT price, we should be allocating rewards to every permanent position in the protocol.

With more resources these positions can grow and flourish to be of great benefit to the protocol.
I really think, as I say above, that we need to better consider what it means to be a specific entity in this protocol, guide vs grantee vs ANO. Unless a guide or grantee's upside is not capped, it simply does not make sense to draw that parallel. An ANO can be willing to grind out work while there isn't enough money because their upside isn't capped, just like any startup. If Factom works, ANO's upside is absolutely tremendous. Unless we are saying that Guides will be paid some fixed number of Factoids regardless of price, so they can capitalize on that tremendous upside, it doesn't work to draw that parallel and say that a guide should be in the same boat as ANOs when fct price is low. Same boat = guides and ANOs having fixed fct revenue, and rising and falling together. Different boats = if fct are 1k$ ANOs still make their 2246 fct per month, but guides will be making substantially less than 600 fct. I believe that everyone is pretty agreed on the second of the two, so I think we need to move a bit away from framing this as a "same boat" situation talking about different entities "deserve" as you have above. Capping upside without capping downside is a dangerous game to play with incentives, and should be seen as an exception, not the rule.
 
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#23
If we are already planning, in the future when the protocol is in a healthier state and the value of fct may be quite a bit higher, on shifting from something like 600 fct to a $ denominated salary, and that $ denominated salary is below the equivalent of 600 fct (which it should be, if a fct = 1k$ guides should not be paid 600k usd a month), then that sounds like the upside is capped to me ;)

Right now there is of course some crossover in upside between an ANO and a guide, all guides currently are or are associated with ANOs, so they can capture upside through their ANO/associated ANO. We can also speculate that guides can capture upside through any holdings of fct.

But it is important in my opinion that we frame and set precedents so that the position of guide is not limited to those already running an ANO, or with stake in the protocol, as that is a step toward centralization and consolidation of power within the ecosystem. Properly establishing incentive structures for paid positions in the ecosystem is necessary to not limit those positions to entities that can capitalize on incentives outside of the actual position. Capping upside while not capping downside is a move in the opposite direction. As such, we should be treating this point in time as an exception to how the ecosystem should work, not as normal functioning of it.

As a thought exercise, imagine if one of the current guides was not an ANO, and had no plans to become one. Lets also say this is a high potential individual, which is of course who we want to be attracting for important positions, and could make 250k a year in their other job. I would have a hard time arguing with them to continue doing the guide job, missing out on their 250k other job, to make 35k a year (current guide rate), and if they do an awesome job and fct price skyrockets, the most they will ever make as a guide is the same as they could make right now in their other job, 250k (random number, i have no idea what the guide job will be in the future, or what they should be paid).

It would be hard to retain that person, and in some ways we are fortunate that we arent in that position right now, but we should do what we can to handle that potential situation in the future and open the position to people like that outside of already incentivized ANOs.
 
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#25
Niels, I think that is probably what will happen. There may not be any explicit dollar denomination, but ANO income generated via coinbase payouts absolutely will be capped. An ANO could not receive $1m per month without either being forced to pass the vast bulk of that to the grant pool or provably invest large sums in development/marketing.

ANOs and guides are clearly quite different. For one, ANOs receive revenue whilst guides receive pay, which means that guides do not need to dedicate that income to the grant pool or reinvest it into business development. However, one thing that binds ANOs and guides together is that any revenue/income they do receive will have to match the value they generate for the network, so I think for Julian to describe the potential ANO upside as uncapped is overstating the position of most ANOs.
 
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#26
@Alex there is nothing wrong with making profit if times allow it, to also be able to to keep your head above water for bad times like we are in currently. We have the efficiency dial to make sure it isn't only profit, just like there is the 3 month review for guides. So don't see why transparent ANOs would be capped other than the means we already have. Competition will kick in the moment we are really able to dedicate serious resources, but that is another discussion ;)
 
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#27
I agree there is nothing wrong with making profit. It wasn't my intention to suggest there was.

I am simply saying that there already is an implicit cap on ANO revenue, which is equal the value that any given ANO generates for the protocol. The same is true of guides. We're all subject to the same economic principles.

The only people with unlimited upside are those that create unlimited value for the network. Others will be forced to continually increase efficiency in order to stay competitive.
 
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#28
Julian - of course the 600 FCT isn't $ capped. If FCT rises to $1000, you don't have to pay back anything. You are talking about an imaginary event in the future.

Guides are not paid $35k a year; they are paid 7200 FCT a year. It is your choice to sell now, or invest for the future. Just like everyone else is doing.

ANOs could also find another job that pays more - But Guides expect them to work for free, without protection or guarantees whilst arguing the opposite for themselves against an empty grant pool.

Having a FCT payout protects the pool against further downside in this volatile market. Yes, we will have to switch to a $ salary when the price rises substantially and stabilises - again, to protect the protocol. But that time isn't close, so as everyone else has said, let's keep the current arrangement for now.

An ANO is a growing business with almost unlimited scope - whilst a Guide represents an individual salary with limited role; you cannot compare the two.

There is already a mechanism to cap ANO rewards - efficiency. Unless Guides also have efficiency at some point, they will have to be strictly capped.
 
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#29
@BobbyEK I agree with everything after the middle "Having a FCT payout"......

Julian - of course the 600 FCT isn't $ capped. If FCT rises to $1000, you don't have to pay back anything. You are talking about an imaginary event in the future.

Guides are not paid $35k a year; they are paid 7200 FCT a year. It is your choice to sell now, or invest for the future. Just like everyone else is doing.

ANOs could also find another job that pays more - But Guides expect them to work for free, without protection or guarantees whilst arguing the opposite for themselves against an empty grant pool.
Well that is not completely fair to guides I believe.

Guides have been persons from the start and have entities for legal protection only. ANOs have been companies with all the risks that companies have. Guides remuneration is income for direct work they provide as a person. I cannot ask some random colleague of mine to do that work. It happens that some guides are in the position to keep the FCT. That doesn't mean it shouldn't be seen as an individual salary, like you also state. The limited role is in the protocol, in the governance we have a rather large role btw.

ANOs have direct control over their own efficiency, not a single guide that says otherwise. That guides would expect them to work for free is completely not true. Don't get how you came to that conclusion tbh. Yes ANOs do have the business risks and it would be really healthy to not rely on ANO income alone (of which I know you don't ;) ). Guides also have a CAP and that is the ANOs deceiding every few months what amount of FCT they should receive for their work.

So an ANO can directly influence the amount of FCT they receive whilst a guide cannot. That seems like a cap to me tbh (which is good) ;)