Gridcoin currently has a payment system intended to compensate developers for time spent and to give an incentive for new developers to join the project. While I agree that the reasons were noble, with the current bank of 31.6 million GRC and the current price of $0.0044/GRC we risk burning the funds faster than we anticipated. In December 2018 we paid 496,126.34 GRC in developer compensation and we haven't started paying for @vortac's marketing expenses. While not drastic, at the current rate expenses will start to pile up.
In the Gridcoin Community Hangout #92 I talked a bit about changing the developer compensation from $60/h to a flat 1000 GRC/h. At the time I didn't think it was necessary to go through the whole network poll process as it's a decrease in expenses until the Gridcoin price increases by 13x, so I figured an internal Slack poll with the affected developers would be sufficient and bypassing a foundation poll would allow us to move more swiftly (for a change). I received some objections to this approach so we will do a network poll.
Regardless, I wanted to explain my rationale behind the initiation as it may not be clear what its benefits and downsides are. I know that most of my points are moot when I could just charge 1000 GRC/h instead of $60/h myself, but this affects all of the paid developers. We might need to change our approach unless the GRC/USD rate picks up speed.
TL;DR: Changing the payment scheme from USD/h to GRC/h would provide more benefits than downsides while reducing expenses. However, we will run a network poll and the change is not in effect.
Changes
The change I propose comes with both pros and cons.
Pros
- Predictable budget
- Self value
- Easier bounty pricings
- Longer lasting foundation funds
- No need for hidden hours
- Dedicated time
- Extended funding
Cons
- Lower hourly payments
- Less attractive for new developers
- Needs new guidelines
Let's go through them all, starting with the pros. Note that these assume the current GRC/USD price or lower. If we got back to ATH
most of these don't apply.
Pros
Predictable budget
Since the current system is tied to whatever GRC is valued at we have no idea what our expenses are going to be. We can guestimate the number of hours people are going to spend but what that translates to in GRC is only known at the time of the payments. Disconnecting from USD allows us to get a better feel on where we are going.
Self value
This one I have a hard time to explain, but one benefit of detaching payments from USD is that it focuses the value on the GRCs and Gridcoin itself. It moves away from "How much is my time worth now?" with its implied intent to develop to sell and instead puts an, albeit arbitrary, developer belief in the project. "How much can I make this coin grow?" if you will.
Now, I know this change doesn't contradict what you could already do with the current system. The receiver is free to do what he or she wants with the received payments, including saving them for future growth. However, I still believe it might alter the mindset if the coin is more self contained.
Easier bounty pricings
Right now there's a huge disconnect between bounties and hourly payments. A good example of this is implementation of the UI redesign bounty which sits at around 100,000 GRC. I put up a rough effort estimation of 160 hours, or 1 man month, which is in the same ballpark as the bounty at "100 hours" given a 1k/h payment. In contrast, with the current price of $0.00438205 we are looking at an expense of 1.75 million GRC if were to hire a contractor.
If we see the bounties as bonus to regular work then they are only attractive for the current developers. While a change in the dev payments doesn't affect the external attractiveness of the bounties themselves, it will be much easier to estimate the required effort to solve a task and, by extension, estimate what the size of a bounty should be. It can also be realistically paid for from the foundation without having to rely on user donations.
Longer lasting foundation funds
Self explanatory, I assume, but it ties in to the subsequent pros. With a lower burn rate we have more options.
No need for hidden hours
I know we have said this many, many times before; Our developers underreport hours spent. For example, @jamescowens has over 100 hours not billed for while working on the scraper. I want this to change to make it more visible what the developers do. We should not undercharge to stop draining the funds. We should take pride in time spent.
Dedicated time
Last year I had the opportunity to take Fridays off from work and focus a whole day on Gridcoin development. This allowed me to focus on tasks for longer periods at a time and had an amazing impact on productivity. While that option is still available for me it comes at the cost of over 400.000 GRC per month, not counting the stray work. This adds up to 5.2 million, or 16% yearly, of the current funds.
Extended funding
Lowering the payments and extending the life of the funding pool allows us to explore compensations for other areas. Why should only the wallet developers receive compensation when we have translators, web designers, show hosts, package maintainers etc? All of these are needed for a functioning ecosystem, yet a small minority receives compensation.
Cons
Lower hourly payments
This would be a massive blow to income of those working with the wallet right now. It means going from $60/h to $4.4/h with the risk of going even lower. This is detrimental for developers who rely on this income stream.
Less attractive for new developers
Developers seeking an income will instantly turn our project down as no software engineer would work for $4.4/h as their main job. It may be a deterrent but seeing as the compensation has attracted 0 new developers since its launch this might not matter. We can state for a fact that after such a change it would definitely attract 0 new developers who are only in it for the income.
Needs new guidelines
This will require new guidelines on what to do when the coin drops or rockets. Do we need to adjust the rates on up- or down trends to better match the size of future rebounds? Or should we stick with what we have? There are probably more questions which would need to be fleshed out and thought through.
@ravonn I wanted to post this comment as a rebuttal to some of the points you made here and just point out my stance on the matter. Please do not take this as a personal attack or anything against you personally. We're all friends here :)
First point I'd like to address is that you brought up the marketing expenses. This is quite interesting to me, since it seems we have a bit of a disconnect here between marketing and developer pay. @vortac is paid monthly (or every few months) for marketing expenses as outlined in the marketing proposal which passed late last year. I'd like to remind everyone of the money we currently spend on marketing:
$6-7 a day on Google Ads, $20 a month on Netsoft, and $1500 annual for BOINCstats and Free-DC. (I confirmed these numbers with vortac today)
Let's simplify this as a monthly cost of $340 USD in GRC per month for marketing (6.5*30 + 20 + 1500/12). This is equal to about $11.33 USD daily.
Since you used the number of $0.0044/GRC in your post, I'll apply it to marketing costs as well (note that this will only apply for this month as the price is variable...).
$340 USD is equivalent to 77,273 GRC monthly or 2,576 GRC daily.
Now I would like to ask this. Under your proposed rate of 1000 GRC per hour of development work, this means that we are effectively paying 77.3 man hours of work on marketing each month. Invoices for the month of December 2018 show our developers billed for a total of 46.25 hours. Assuming this remains unchanged in the future, that means we would be spending 67% more on marketing monthly than on development. I ask simply, does this make sense for us?
Additionally there is another point I'd like to address. We can still keep the Foundation funds from running dry without resorting to such drastic measures as cutting dev pay by 92%. I proposed last month that instead of $60 an hour we could lower compensation to $30 an hour, even going so far as to say I'd welcome $20 or $15 an hour. These would effectively cut our cost to the Foundation by 50%, 60%, and 75% respectively. We must remember that our goal here is to not just attract new developers, but also retain the current amazing team we have. Can we really sustain full development when we are paying people almost half the minimum wage (in my country at least)?
Finally, a personal note. I want to clearly state: I do not think we should be paying $60 an hour. I have cut my own hours considerably the last several months (you can check my invoices to verify this) and charge half rate for certain tasks I do not find "worthy" of full rate, such as regression testing and client builds/distribution for testnet. I would firmly support a compensation rate of $30, $20, or even $15 an hour for our developers. However, a rate of 1000 GRC/hour, while tempting from a Foundation perspective, is frankly a disservice to our quality developers who deserve much more than $4.40 an hour. Thank you for reading and I welcome further discussion on this topic.
I don't mind separating developer expenses (skills we can bring to the table) and things we are unable to provide ourselves or prices we do not control. That was one point I thought of but couldn't fit anywhere; we should provide what we can and buy what we need. The UI redesign falls into this category as we do not have a UI designer in our community, at least not an active one (I'd love if we had one on Slack), so it had to be purchased.
Also, remember that it was only 46.25 hours in December because all of us, including you, hide hours. In reality it was more likely closer to 200h, an abnormally active month perhaps.
This might very well be a better route to take which is why I included a 60->30 option in the internal poll. When we make the network poll we should include it there as well, maybe along with the other USD options.
With the current development team I am positive we could. With a new team, most likely not. Most of the people working now did so long before the compensation kicked into gear, though I agree that they deserve appreciation for their time. I know the USD->GRC switch is like ripping the pacifier from a baby but we need to find a balance between banking and expenses. My drastic changes or your sensible proposal :)
I agree with Barton that 1000grc/h is too low but I also think marketing is almost as important as development. I'm sure there's a way to make a middleground? I'm in favor of anything between 15$/h and 25$/h personally.
If we're going to reduce the pay, the lowest it should go is minimum wage (approx $15/hr) down from $60/hr
I don't think we should compare it to wages, mostly because it's not a wage. Remember that many, many open source projects survive and thrive from dedicated members who contribute for free out of interest and curiosity. That includes us before the compensation, and it includes us now when you go beyond the wallet scope. I'm not saying that the wallet developers are in it for the money, but that the non-wallet contributors are in it because they enjoy doing it.
Some curiosa: Sweden does not have the concept of minimum wage, and the US minimum wage is $7.25.
When you do the poll, I would really appreciate it if you did multiple wage/hour suggestions rather than just a yes, no and abstain poll.
Also, no multiple choice polls =)
I have suggested a USD only poll for now.
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TrufflePig@barton26 you left out math, all math that better proves ravon's point and I have some major points based over the past 1.5yr of my 3 years being involved.
Quoting barton26 " Invoices for the month of December 2018 show our developers billed for a total of 46.25 hours " oh so the math and total doesn't matter since it's only 46.25hr? 46.25 x $60hr is $2775usd for December 2018 alone. OK what and or how did this help the end users value , crunchers value? Only your pocket along with other dev's. That's only December 2018 so someone needs to post a spreadsheet since the dev team went public and open per the vote but in actuality closed and the GRC8 clique. You guys have rejected improvement and advancements from the community and unless you are part of the slack secret squirrel club that $60hr amount and vote to community dev does not include you. I know because although my first fix submission was ignored and 8 months latter code @barton26 was paid for fixing /src/net.cpp lines 113-118 at that time as Gridcoin's centralized seed nodes as they were 2/3rd @cm-steem's nodes dns and he learned about round ribbon DNS. Peppernrhino's code submissions were ignored and I am sure countless others. But people like Caraka fixing GUI typo's from code paid for already dev's just did , so our ethical value is to bill 2-3 times for the same code 1rst to be changed 2nd to fix typo's and 3rd because you didn't get it right the first time.
So where and how has this helped and benefited the community? It has not , a matter of fact the value of Gridcoin not only tanked from thomasb hack-n-hire screwing the community July 4th 2017 but it has tanked and absolutely no recovery since Rob Halford was pushed out of his own half ass mix n match multi coin code.
You cannot milk something that is dying , the current system and methods are not working , yes the fake foundation aka wallet ID Gridcoin Foundation has over $1,000,00usd but thats not there to pay $3000mo to dev's matched at $3000 for marketing when neither is increasing the end user's value ( i'm sure the lack of ethics and theft of idea's and work of others and people from the grc8 like dutch fraudulently installing Boinc on machines and our wonderful trusted community members shrug it like other crap and lie and hide it } I mean FFS cm-steem is still stuck on his own SSL BS after the community said screw an SSL project req but every new application to be whitelisted he makes sure to point it out. Just like our fearless mature leader cm-steem screwed the Gridcoin relationship with Prime Grid and they forced us to drop them.
25,000grc = $100usd W T F is that? I support ravon's " fix the project " vs barton's " let's bleed it dry , at-least us 8 got overpaid " business model. People coded for free prior to the first pay vote far below $60hr and if you fully back and support the open-source project the $$$hr pay vs killing the project should be more important to you.
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