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Offline Agent86

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DAC employees
« on: May 21, 2014, 02:31:54 PM »

I want to propose a way for a DAC to have ongoing funds to do development and promotion in a democratic way, without designating a specific portion in the beginning or begging the community for donations.

Just like DACs elect delegates to write blocks… DACs could also elect employees (such as paid developers).

How it works:
Right now every spent output is assigned to a delegate (for/against).
You could make it so every spent output assigns a desired inflation rate… e.g. 2% and designates (for or against) a key for a potential employee.

The median of all specified inflation rates is taken e.g. 2% and then the elected employee/employees are granted the power to issue new shares at a maximum rate of 2% per year (proportional also to the amount of stake supporting them).

If you don't think the community needs paid employees, you just set your vote to 0% inflation.  If more than 50% of the stake doesn't want employees with power to issue shares than there will be no employees (median inflation would be 0%). If someone says they want 100% inflation it doesn't matter because it takes the median.

Employees will be judged on how much money they use and how effectively they use it.  They will all need to maintain a public ledger of where the money goes if they want any credibility and they can be fired in a heartbeat.  They can only issue new shares slowly over time so they have no way to make a big money grab.

EDIT 6/18:  Voting method
The voting method for employees I propose to be "approval voting."  There are no down-votes and no restriction on how many different employees you can vote for using your stake.  Not voting for an employee indicates you do not support that employee.  Along with your vote for an employee you indicate an appropriate annual salary in bips (gets paid out daily).  Only an employee with over 50% support from the DAC will end up being paid.  Their salary is the median voted by stake (people who did not vote for the employee are included in the median as voting for a "0" salary).

Any "inactive stake" (no transactions for over 1 year and paid inactivity penalty) should be removed from the voting algorithm.
« Last Edit: June 18, 2014, 12:08:24 PM by Agent86 »

Offline xeroc

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Re: DAC employees
« Reply #1 on: May 21, 2014, 02:45:39 PM »
sounds interesting .. much like what memorycoin is doing ..
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Offline Agent86

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Re: DAC employees
« Reply #2 on: May 21, 2014, 04:03:55 PM »
I'm not familiar with what memory coin is doing in this regard.  I couldn't find it from a quick search so maybe you can fill me in.  I would be surprised if it was very similar but who knows.

Offline luckybit

Re: DAC employees
« Reply #3 on: May 21, 2014, 04:20:27 PM »
I want to propose a way for a DAC to have ongoing funds to do development and promotion in a democratic way, without designating a specific portion in the beginning or begging the community for donations.

Just like DACs elect delegates to write blocks… DACs could also elect employees (such as paid developers).

How it works:
Right now every spent output is assigned to a delegate (for/against).
You could make it so every spent output assigns a desired inflation rate… e.g. 2% and designates (for or against) a key for a potential employee.

The median of all specified inflation rates is taken e.g. 2% and then the elected employee/employees are granted the power to issue new shares at a maximum rate of 2% per year (proportional also to the amount of stake supporting them).

If you don't think the community needs paid employees, you just set your vote to 0% inflation.  If more than 50% of the stake doesn't want employees with power to issue shares than there will be no employees (median inflation would be 0%). If someone says they want 100% inflation it doesn't matter because it takes the median.

Employees will be judged on how much money they use and how effectively they use it.  They will all need to maintain a public ledger of where the money goes if they want any credibility and they can be fired in a heartbeat.  They can only issue new shares slowly over time so they have no way to make a big money grab.

Several ideas exist for this such as Role Based Bounties and I think the Memorycoin team implemented exactly something like this.

It's a good idea to let DACs hire but we need to have an effective way of voting. It's actually harder to hire for long term role based bounties than for short jobs which can be easily defined in a smart contract.
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Offline Agent86

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Re: DAC employees
« Reply #4 on: May 21, 2014, 04:34:36 PM »
Several ideas exist for this such as Role Based Bounties and I think the Memorycoin team implemented exactly something like this.

It's a good idea to let DACs hire but we need to have an effective way of voting. It's actually harder to hire for long term role based bounties than for short jobs which can be easily defined in a smart contract.
The point of my post was to propose a potential effective way of voting.  You vote using your stake on the blockchain just like we have to vote for delegates.

The normal way these bounties seem to work is people ask for donations on a forum to fund a particular project, or the developer uses IPO money or a "premine" and then the developer gets to decide how it is spent until the money is all gone.

My proposal is different and more decentralized, it gives everyone a say and makes everyone chip in, it gives DACs the flexibility of issuing new shares.

Offline santaclause102

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Re: DAC employees
« Reply #5 on: May 21, 2014, 10:49:44 PM »
Suggestion for modification: Take not the median of natural numbers but the average of a range that was voted for the most. For example: Ranges are defined at: 0.1-0.5, 0.5-1.5,1.5-3,3-6. The ranges are getting wider and wider. If most votes are in the 0.5-1.5 range, 1.0 is the elected inflation rate....

Offline bytemaster

Re: DAC employees
« Reply #6 on: May 22, 2014, 01:00:18 AM »
The challenge is allocating other peoples money.   

My suggestion would be to fund employees from revenue rather than via inflation. 
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Offline Agent86

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Re: DAC employees
« Reply #7 on: May 22, 2014, 01:23:02 AM »
The challenge is allocating other peoples money.   

My suggestion would be to fund employees from revenue rather than via inflation.

Ok, I guess I'm thinking of revenue as the transaction fees destroyed, so basically shares destroyed are revenue and then you pay employees by issuing new shares so you are right that there wouldn't necessarily be any net inflation.  So I guess it isn't right to specify a positive level of inflation.

Maybe you are also thinking of bitUSD or bitGLD transaction fees as people transact in those assets is the revenue, and then we can pay employees in bitUSD?

So instead of selling the bitUSD transaction fees and destroying the BTS, the DAC could keep bitUSD on hand as a cash balance to pay employees?

Is this sort of what you are thinking?  When you say revenue do you mean transaction fees or are there other types of revenue?

As far as allocating other people's money, I'm not sure exactly what you mean by this.

On some level if you are saying that issuing new shares or bitUSD is taking from everyone, I don't think this makes it bad if everyone has a say in it proportional to their stake.
« Last Edit: May 22, 2014, 01:40:28 AM by Agent86 »

Offline luckybit

Re: DAC employees
« Reply #8 on: May 22, 2014, 07:13:29 AM »
Several ideas exist for this such as Role Based Bounties and I think the Memorycoin team implemented exactly something like this.

It's a good idea to let DACs hire but we need to have an effective way of voting. It's actually harder to hire for long term role based bounties than for short jobs which can be easily defined in a smart contract.
The point of my post was to propose a potential effective way of voting.  You vote using your stake on the blockchain just like we have to vote for delegates.

The normal way these bounties seem to work is people ask for donations on a forum to fund a particular project, or the developer uses IPO money or a "premine" and then the developer gets to decide how it is spent until the money is all gone.

My proposal is different and more decentralized, it gives everyone a say and makes everyone chip in, it gives DACs the flexibility of issuing new shares.

I have some ideas on how to do this on this thread https://bitsharestalk.org/index.php?topic=998.0
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Offline luckybit

Re: DAC employees
« Reply #9 on: May 25, 2014, 11:40:38 PM »
Several ideas exist for this such as Role Based Bounties and I think the Memorycoin team implemented exactly something like this.

It's a good idea to let DACs hire but we need to have an effective way of voting. It's actually harder to hire for long term role based bounties than for short jobs which can be easily defined in a smart contract.
The point of my post was to propose a potential effective way of voting.  You vote using your stake on the blockchain just like we have to vote for delegates.

The normal way these bounties seem to work is people ask for donations on a forum to fund a particular project, or the developer uses IPO money or a "premine" and then the developer gets to decide how it is spent until the money is all gone.

My proposal is different and more decentralized, it gives everyone a say and makes everyone chip in, it gives DACs the flexibility of issuing new shares.

I see no point in issuing new shares. Just use the shares people donate. Issuing new shares dilutes from everyone and is a tax. You're asking for redistribution of wealth.
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Offline Troglodactyl

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Re: DAC employees
« Reply #10 on: May 26, 2014, 04:10:27 AM »
The challenge is allocating other peoples money.   

My suggestion would be to fund employees from revenue rather than via inflation.

Ok, I guess I'm thinking of revenue as the transaction fees destroyed, so basically shares destroyed are revenue and then you pay employees by issuing new shares so you are right that there wouldn't necessarily be any net inflation.  So I guess it isn't right to specify a positive level of inflation.

Maybe you are also thinking of bitUSD or bitGLD transaction fees as people transact in those assets is the revenue, and then we can pay employees in bitUSD?

So instead of selling the bitUSD transaction fees and destroying the BTS, the DAC could keep bitUSD on hand as a cash balance to pay employees?

Is this sort of what you are thinking?  When you say revenue do you mean transaction fees or are there other types of revenue?

As far as allocating other people's money, I'm not sure exactly what you mean by this.

On some level if you are saying that issuing new shares or bitUSD is taking from everyone, I don't think this makes it bad if everyone has a say in it proportional to their stake.

Representation isn't equivalent to consent, and dilution with seignorage granted to someone else is just redistribution.  I say the delegates should be able to use transaction fees to hire people, take them as profit, or destroy them as dividends, and the shareholders should elect the delegates based on their plans.  Additionally there's obviously the centrally controlled AGS fund for startup funding, and shareholders have motivation to invest time and resources to grow the value of their investment voluntarily.

Offline toast

Re: DAC employees
« Reply #11 on: May 26, 2014, 03:39:01 PM »
I say the delegates should be able to use transaction fees to hire people, take them as profit, or destroy them as dividends, and the shareholders should elect the delegates based on their plans.

Yep. This is what will happen no matter what you want to happen, as delegates are the ones who produce blocks and thus decide which rules they use to produce them.
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Offline santaclause102

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Re: DAC employees
« Reply #12 on: May 26, 2014, 03:57:40 PM »
I say the delegates should be able to use transaction fees to hire people, take them as profit, or destroy them as dividends, and the shareholders should elect the delegates based on their plans.

Yep. This is what will happen no matter what you want to happen, as delegates are the ones who produce blocks and thus decide which rules they use to produce them.
What are the rules the delegates can choose to aspect or reject?

Offline Agent86

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Re: DAC employees
« Reply #13 on: May 26, 2014, 04:54:28 PM »
Representation isn't equivalent to consent, and dilution with seignorage granted to someone else is just redistribution.... and shareholders have motivation to invest time and resources to grow the value of their investment voluntarily.
If transaction fees are insufficient I'd suggest convincing shareholders to reinvest directly and voluntarily.  Allowing even a majority of stakeholders the discretion to dilute the stake of the minority without their consent is problematic.

I think you are worried about some kind of tyranny of the majority if elected employees were allowed to issue new shares.  I think what you have to keep in mind is that there is very little motivation for a majority to try to take advantage of a minority or "redistribute" money to themselves because there is just nothing keeping the minority there.  It's just too easy for them to take there support to a DAC that isn't majority owned by stupid A*holes.  And then those majority owners become majority owners of a whole lot of nothing.

It's just like if the US government tried to buy up half of bitshares X and then control it.  All they would do is put a bunch of money in peoples pockets who would then proceed to fork the DAC without the government stake honored.

A DAC is a FREE ASSOCIATION of people who's interests are aligned.

Our current representative government has problems and opportunities for abuse and corruption but a huge part of that is because of the barriers to entry/exit/participation.  If you have to take time off work to vote and then sometimes stand in line for hours and then someone makes a law you don't like, what can you do?  You can't say well "count me out" I'll not be following these laws and will just join this other group instead.

I think the larger a DAC became the more you would find how ineffective relying on volunteers to do things to boost everyone's value would become.  If you own 1 millionth of a DAC are you going to take time out of your day to grow the market cap of that DAC just so you can get 1 millionth of the fruits of your labor?

Offline toast

Re: DAC employees
« Reply #14 on: May 26, 2014, 05:03:43 PM »
I say the delegates should be able to use transaction fees to hire people, take them as profit, or destroy them as dividends, and the shareholders should elect the delegates based on their plans.

Yep. This is what will happen no matter what you want to happen, as delegates are the ones who produce blocks and thus decide which rules they use to produce them.
What are the rules the delegates can choose to aspect or reject?

A delegate can do whatever they like, just like yourself. You can modify the code, rebuild the client, and run it. The only question is whether the rest of the network will accept it.

So if you choose to only accept transactions with a higher than standard fee, you can, because it will still validate.
If you choose to accept a *lower* than standard fee, the rest of the delegates will not validate your block. So you'd need a majority to change.

If a delegate chooses to destroy his income as dividends, the rest of the network will accept it, since it's just a standard transaction.
If a delegate tries to take a higher income for himself (in the case it's not 100% of income already), the rest of the network will reject it, as it won't validate.

Just think about whether the change is a *stricter* or *looser* requirement and that will tell you whether a delegate needs majority approval or not.
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