Compensation in DAOs: A Proposal

Abstract

Compensation within DAOs presents unique challenges, particularly regarding aligning contributors’ interests and motivation with organisational goals. Traditional time-based vesting schedules may not incentivise long-term commitment or performance, leading to potential misalignment and unfairness. This paper proposes an alternative approach to vesting schedules, based on the value accrual to the underlying asset. We argue that a value-based vesting schedule offers a more meritocratic and performance-driven approach to compensation that aligns contributors’ interests with the DAO’s long-term success.