KIP-10: KlimaDAO Compensation Framework

Summary: The DAO would like to ask permission from the community to formalize the contributor compensation process and framework. This framework will be the guidelines in which the DAO can operate to pay its contributors, if any amendments are needed they must undergo another community vote. To ensure the longevity of the protocol, increase liquidity initiatives and to help fund future projects the DAO would like to increase the treasury revenue gained from bonding from 10% up to 30%. Note, increasing the fee will not negatively impact staking or bonding.

Abstract: The DAO has seen incredible growth in the amount of contributors since its inception. The protocol grew to an average market cap of over $100mm with over 80 contributors within 3 months of operation. Since then, the protocol has seen a contraction in market capitalization and with that a contraction in treasury KLIMA valuation. As stated in a recent Klima Medium Post, the DAO is focused on the continued development of the protocol. A formal framework is necessary to ensure fair and equitable compensation for sustained long-term growth and development.

Given the current market conditions, expected bond revenue, and amount of contributors within the DAO, the treasury only has a runway of approximately 3 months. This is based on the inflow of bonding revenue relative to the outflows from contributor allocations each month (assuming a price / Klima of $50). The DAO believes that continued contributor compensation is the best way to ensure protocol longevity and development.

The proposed framework has two key components to it:

1. Department leads will be given an option to move toward vested KLIMA to help mitigate selling pressure and to allow for more immediate compensation to regular contributors

2. Increase the amount of KLIMA that is distributed to the treasury to maintain current contribution levels

It is important to note that for every KLIMA that is minted for bonds, 0.1 KLIMA is minted for the DAO. For context, Olympus does 1 OHM for 1 KLIMA minted for the DAO. The DAO would like to increase this up to 0.3 KLIMA minted for 1 KLIMA minted for bonding. This extra KLIMA will be utilized for liquidity endeavors, contributor payout and any potential outsourcing of protocol work. The DAO treasury currently holds <30,000 KLIMA and the current payout per week to contributors is ~ 1.7k KLIMA.

Proposal: The DAO to adopt the formalized process and to increase the revenue gained from bonding to the treasury to up to 30%