AADAO’s decision to sunset operations comes as a surprise. In fact, we discussed how they might revise their current mandate as recent as yesterday – and contributors expressed a desire to defer the decision to January 2025.
Core Issues
The Mandate
The fundamental challenge facing AADAO, as seen from an oversight perspective, lies in its inability to effectively define a clear and actionable purpose for its future. The current mandate of galvanizing the DAO’s efforts around “value accrual for ATOM” is overly abstract and fraught with practical and known shortcomings:
- Subjective Interpretation of “Value”: The term “value” continues to lack concrete definition and qualification, leading to inconsistent and subjective interpretations; as made manifest through its decisions and key activities
- Ambiguous ROI Metrics: The absence of clear and standardized methods to measure return on investment (ROI) results in inconsistent evaluations of the DAO’s effectiveness (internally and externally).
- Speculative Impact on ATOM Price: The linkage between the DAO’s activities and any measurable positive price movement for ATOM is speculative and unsupported by evidence.
- Ventures: The ventures function is fundamentally incompatible with the reporting obligations of a community-owned DAO. It would not be an overstatement to suggest that the founders of AADAO, along with its various leads, presented the community with a vision of a transparent, public DAO, while their actual ambition appeared to be creating a venture capital-style entity funded by public resources.
For nearly two months, contributors have been unable to articulate a more focused scope or define clearer operational objectives. **This ongoing paralysis reflects a failure of organizational identity and relevant purpose. It is doubtful that friction with the oversight function is the issue. We’re just a convenient and politically available excuse.
Rather, confusion and uncertainty with what the hub needs and what AADAO can actualize within their established operational framework and individual capabilities, are factors. And most importantly, it’s about what they can get paid.
It’s About Money
The primary barrier to AADAO’s continued viability under its current roster of contributors is rooted in unresolved compensation issues and divergent expectations regarding remuneration for full-time roles.
While the contributors have attributed their “discontinue/dissolve” decision to operational impediments caused by oversight, recent conversations suggests that the primary trigger for their collective decision relates to compensation expectations and clearer limitations to what they they can be paid.
The fundamental tension exists not between oversight procedures and operational efficiency, but rather between contributors’ desired compensation levels and connecting entitlement to demonstrable effectiveness to the community.
Failure of Contributor Retention Stems from Misuse of Bonus as a Recruitment Tool
The recruiting framework for contributors was built around a complex, speculative, and unapproved bonus-based remuneration system. Contributors accepted below-market base salaries in exchange for the prospect of “high-reward” bonuses. That was the trade-off.
This arrangement was predicated on the assertion—promoted by the former GM—that ATOM would reach a price of $20, enabling contributors to qualify for 50% of their performance-based bonus eligibility for merely average individual performance.
Beyond individual performance bonuses, the bonus compensation structure also included team bonuses, retention bonuses, and bonuses for strategic committee members. Unfortunately, this chaotic variable compensation structure served as a primary recruitment tool – and due to the leadership and culture of the organization, this theoretical possibility of bonuses transformed into an promise and expectation.
Contributors expressed frustration with oversight for raising questions about vague and inconsistent KPIs, claiming that such inquiries were obstructing their ability to receive bonus compensation. They explicitly stated that they would not have accepted their roles had they known that the bonus methodology was not formally ratified. Instead, they accepted their positions under the assumption that the methodology, as presented to them, was already established policy, requiring only superficial KPIs to justify the disbursements (this is not how transparent organizations or operators reason or behave).
Due to public discussions surrounding the former GM’s termination, substantial community disagreement with the bonus methodology was unequivocally established. The community overwhelmingly rejected two key aspects of AADAO’s proposed bonus structure:
- Rewarding bonuses for average performance and
- Establishing bonus “incentives” without community-approved Key Performance Indicators (KPIs), a clear deviation from what was authorized under Proposal 865.
Imo, the root of the issue lies in the organization’s failure to define its purpose clearly. The abstract and poorly understood mandate has hindered contributors and leadership alike from developing meaningful and measurable KPIs throughout the year.
The root of the issue also lies with leadership recruiting contributors under false and or half baked pretenses.
Without a clear purpose, there can be no clarity about what constitutes success — or what people should be reasonably paid.
In part, it remains the opinion of oversight that the bonus structure was conceived and promoted in a convoluted fashion to strategically obscure the actual possible compensation of contributors.
Retraction of the Bonus Program and Current/Future Compensation Realities
Recognizing the flaws in the bonus methodology and program—especially its lack of transparency and accountability—contributors recently voted to return the remaining 88k bonus ATOM to the community pool. As a result, contributors’ compensation now consists solely of their base salaries.
Salary Increases (as of 10/31)
Oversight has acknowledged that several contributors’ salaries were less competitive compared to senior team members and advocated for increases as early as August.
In October, @CuriousJ proposed average salary increases of 30–36% for eight contributors – utilizing the former GM’s $14,500 salary and 1.2% of bonus ATOM as funding sources for the increases.
While oversight supported the principle of more competitive salaries, we found the specifics of his various proposals problematic:
- The proposed salary increases lacked consistent justification and were unevenly applied across roles without a sound rationale. These adjustments were largely based on what individuals desired or found “acceptable,” rather than being grounded in a consistent and objective evaluation of the responsibilities or any demonstrated expansion of responsibilities.
- The new salaries exceeded the compensation brackets established via Proposal 865.
Oversight’s Position:
- Oversight challenged the proposed 36% increases as exceeding the compensation brackets established under Proposal 865.
- While one contributor’s compensation was acknowledged as below market norms (within the $15-$20 hourly range), other proposed increases were deemed unjustifiable within the established compensation tiers via cosmos hub governance.
- Following negotiations with @CuriousJ and @Syed , oversight agreed an average increase of 27% for eight contributors’ salaries did not breach the provisions of proposal 865, and the increases were implemented with October 31 payroll.
Oversight also faced significant resistance from several contributors when we insisted that salary increases be communicated transparently and publicly. Such resistance is fundamentally at odds with the values of transparency and integrity that AADAO professes to uphold and abide by.
The intersection of strategic uncertainty and unresolved compensation expectations are more likely reasons why current contributors have chosen not to continue. Resolving these challenges demands a thorough and honest reassessment of the DAO’s foundational purpose, coupled with an intellectually and socially honest evaluation of its successes and failures.
Additionally, there exists a significant disconnect between the contributors’ desired compensation levels and the objective value of their work. Bridging this gap is essential for any future iteration of the DAO to align compensation expectations with measurable contributions and demonstrable impact.
Conclusion
Claims that oversight obstructs AADAO’s operational effectiveness are disappointing.
AADAO’s announcement to fold is a product of contributors’ dissatisfaction with their economic incentives. Despite salary increases, the majority of contributors continue to believe their compensation is inadequate for their keep.
The decision not to continue the DAO – or with the DAO reflects a disconnect between what they want versus what they can get.
Path Forward
The key questions for the community are:
- Can a new team develop a relevant and revised mandate?
- Would they accept current compensation levels?
Any new leadership/contributors would likely need to operate within existing compensation constraints, as higher rates beyond what is currently established as compensation are unlikely to receive hub approval.