Contributions: Basic compensation structures

One of the main things that separates a DAO & DHO from a traditional company is in compensation.


Bitcoin is a DAO! A DAO designed to provide security for itself (via mining and increasing electricity costs required to 'attack' the network). It's an incredibly successful DAO, it has incentivized and coordinated to grow and consume 0.1% of ALL energy generated on earth! Wow!

What does this mean...

It means that the millions of folks who got behind Bitcoin to do marketing, meetups, build tools, or anything other than mining were only compensated if the price of Bitcoin going ups proportional to their holdings of Bitcoin (if they happened to hold Bitcoin, which usually meant they had to first spend money or burn electricity to acquire the token)

The Bitcoin network has never directly compensated for anything other than mining!

This creates another condition where those who own more Bitcoin (regardless of any other contributions they make) earn more compensation when Bitcoin grows (in price appreciation). This has a wealth concentrating effect and is ineffective at equitably compensating contributors. This is one reason why many new cryptocurrencies that were literal copy+paste forks of Bitcoin were created in the early days. As it was more rewarding for a developer to create their own new currency and develop that token, then it was to work for Bitcoin (because there was no equitable way to compensate his development work).

The DAO to Corporation Compensation Continuum

Bitcoin demonstrates one extreme end of the DAO to Corp continuum - where Bitcoin only directly compensates for a singular outcome, yet it still was able to compensate (through price appreciation of Bitcoin) an infinite amount of contributions.

On the other extreme end there is no shared token/value creation. All corporate contributions are paid in the form of wages and nothing more (traditional employees without stock-options). There's no shared value to grow as a community. You do your work, get paid, and that's it.

Hypha DAOs sit near the middle. Where work is partially compensated directly upfront in payment tokens. Though the most impactful and beneficial potential form of compensation is with the DAO tokens.

Through mimicking elements of the traditional compensation routes (e.g. Assignments), DHOs started looking more like a decentralised and global cooperative and less like a DAO. It's encouraged to remember the main financial goal of these organisation styles: create a token, and build value for that token, together.

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