On Finder's Fees

NounsDAO
1

TL;DR - Are we comfortable with Finder’s Fees for people bringing in high quality proposals?

CONTEXT

Soon, an Explorer Grants recipient will go on-chain with a proposal. This is incredibly exciting and exactly what we built Explorer Grants for - to bring more valuable proposals by builders to the DAO.

Before it goes on-chain and we discuss the logistics of that proposal, I want to discuss a more philosophical point around Nouns and Explorer Grants, and separate that conversation from the prop itself, so as not to overshadow it.

WHAT ARE FINDER’S FEES?

Finder’s Fees seem to be a bit polarizing in Nouns and crypto, but they are a widely popular in various industries because they align incentives - people only get paid when they deliver the value. Recruiters get paid a percentage of a recruit’s salary, marketers get paid when they bring in leads or sales, and finance people get paid a percent of what their works bring to the firm. In our case, people would get paid for bringing and passing a high quality proposal.

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FEES IN NOUNS

There is a precedent for Finder’s Fees within Nouns - the DAO (almost) unanimously passed a prop with a 7% reward in July of last year Prop 113 - paying someone ~7 ETH for bringing the proposal to the DAO. 113 lead to the “This is Nouns” video which was clearly a net positive for the DAO and lead to our first Droposal.

The downstream effect of one person’s effort to bring in a proposal was incredibly positive, and likely worth more than the fee.

In the case of Explorer Grants, people might say - aren’t you already getting paid a salary from your prop? Yes, but:

  • Partially performance-based pay is standard in many industries
  • Our salary for our pilot was much lower than most Nounish teams, and knowing that the DAO is supportive of Finder’s Fees would help us keep that up-front salary low
  • Finder’s Fees will help us reinvest in our project and the ecosystem, not just pay ourselves

I think the potential for Finder’s Fees is huge across the DAO, not just for Explorer Grants:

  • Higher focus on performance for pods like Explorer Grants, DCS, NSFW, etc…
  • Financial incentive for Nouners to Nouns-pill their friends and have them contribute to the DAO
  • New roles can emerge because there is precedent for rewards: bringing in big brands, recruiting artists, creating DAO partnerships
  • One could see a world where front-ends even take a smaller fee for bringing in new sales or proposals, reducing the cost of their up-front proposals

Performance-based pay would allow Nouns DAO to save money by paying mostly when value is delivered, not when it is promised.

Follow-Ups

Counterpoints:

  • Does this align incentives? Wouldn’t this just incentivize someone to ask for more money so they get a bigger fee?
      1. If the DAO passes a big proposal, is that wrong? Isn’t that what the DAO wants?
      1. We could go the route of flat rewards - 5 ETH no matter what. (Although if someone could get Nike to put Nouns on a jersey - that would surely be worth more than 5 ETH?)
  • Won’t this just accelerate treasury spending?
    • Maybe, but if the treasury is going to valuable proposals - isn’t that the whole point?
  • Wouldn’t the Explorer Grants participants have contributed to Nouns anyways?
    • I don’t think so - they would have if they could.
    • You could make the same case of any affiliate marketing program or recruiting service!

Things to consider:

  • If we want to establish this as a social norm, we should find a friendlier term than “Finder’s Fee”
  • What should the percentage of the reward be? 5% of total ask?

Any thoughts?