PoolTogether Research Report: Vibes, Labor, Constituencies
Other Internet received funding from PoolGrants to conduct research into PoolTogether's off-chain governance and social architecture, with a focus on its Discord and governance forum. Our research was guided by questions such as: how should the "long tail" of contributors be rewarded? How did PoolTogether gain its reputation as a wholesome, encouraging community? And how might older ways of organizing corporations help solve the problems DAOs are facing?

This is the second in a series of research reports on off-chain governance in the crypto ecosystem, co-funded by the Ethereum Foundation.


PoolTogether wants to be the people's gateway to DeFi. This prize-based savings protocol makes the value propositions of the Ethereum ecosystem (and crypto as a whole) relatively easy to understand. Users deposit money and are automatically given the chance to win a lump sum every week — at no additional cost or risk to their deposited funds. The welcoming ethos created by the core team has percolated through the intimate PoolTogether community, creating a lively and wholesome energy as well as a strong group of governance participants and community contributors. At the same time, PoolTogether has reached an impressive $130mm TVL.

Our report on Uniswap showed how certain design choices prevented the development of a strong core community. PoolTogether could not be more different. But while the community is known for its friendly atmosphere, below the surface, challenging problems remain unresolved. What happens when a community's ambitions and a core team's do not align? How should different types of contribution be valued and compensated? And can PoolTogether's camaraderie survive major changes that may happen in pursuit of growth? In this entry into our research on the social and organizational infrastructure of off-chain governance, we examine these questions. If decentralized protocol contributions are to be one possible future of work, we need to make sure this new labor environment is better than what came before.

Come for the tool, stay for the vibes: how did PoolTogether cultivate a wholesome and lively community?

PoolTogether has adopted a community-centric approach from the start. The typical PoolTogether contributor journey begins with prospective community members joining the Discord out of curiosity and staying for the vibes, as many interviewees confirmed:

I thought about forking PT, but started hanging out in the discord and forum, and people were so amazing, so I joined more actively.

In PT I found my kind of lane as personalities do. What was motivating was the project fit my criteria of what I would want to work for/with and I was actively looking to do so in a bigger way. There's a lot of places where you're not gonna find that fit for a million different reasons.

Here we discuss four key factors that contribute to this general feeling of "wholesomeness" and positivity within the community: 1) a dynamic social architecture, with a flexible channel structure that is responsive to the requirements of the community, 2) the openness and involvement of the team in the Discord, 3) the focus on social good and financial responsibility, and 4) the clearly articulated and easily accessible governance process.

1: Flexible and responsive social architecture

With just over 7,900 $POOL holders, PoolTogether is a relatively small project compared to other DeFi protocols. At present the Discord counts approximately 7,800 members, suggesting that a significant number of tokenholders have joined the server.

At time of writing, the Discord is structured according to 6 main sections:

  • Welcome: read-only introduction with welcome and automated announcements
  • PoolTogether: links to the project's material, automated feeds from Reddit and Twitter, documentation from community calls and events announcements
  • Chat: where discussion happens
  • Contribute: coordination of tasks and activities among community members
  • Languages: where non-English discussion happens
  • Archive: inactive channels


Discord contributors are assigned roles (including Community Advocate, $POOL Hodler, Governance, Snapshot Multisig, Swim Team), plus labels indicating which projects they are working on. But, according to community members we interviewed, these Discord labels are not widely used. Instead, contributors obtain roles more informally as they participate in various projects and conversations.

Moderators and community members are actively encouraged to take initiative with regard to the structure of the Discord (starting conversations, creating new channels, organizing voice calls) and the organization of community activities. Thanks to one core contributor's initiative, several tasks have been automated, from announcements and calendar invites, to recordings of community calls, to social media feeds. This facilitation of information discovery and archival helps improve the experience of the members.

I try to automate as much as possible - that's not for myself because I'm lazier - it is a lot more work for me, but I can automate it for other people and it can improve their experience dramatically. Role reaction menus, for example. Servers tag @everyone and @here a lot and this is annoying. I've basically told the community that I will use these in emergencies or super important announcements - for other things I have set up things like announcements, calls, governance - and people can self-grant themselves these roles and this helps so that people don't get harassed.

Another example of this community-led approach is the Swim Team, which was formed with the explicit purpose to onboard prospective contributors and coordinate community activities. This later turned into the PoolGrants program (initiated through PTIP-14), which set aside a $500,000 quarterly budget (27,000 POOL) with a maximum of $100k for operating budget. The program was renewed through PTIP-34.

PoolTogether's Discord channels are easy to re-configure

PoolTogether's Discord channels are easy to re-configure.

2: Core team's accessibility and active involvement on Discord

From the beginning, the core team adopted Discord as their primary means of communication, slowly scaling back their use of the private channels and instead “working in public as much as possible” — as one member of PoolTogether Inc told us:

All the PoolTogether Inc folks are in Discord and we do all our internal communication on Discord as well. I think that is really important for teams, like if you're on Slack and your community is on Discord you're not going to make it. (core team)

This has resulted in an interesting blurring of the lines between employees and Discord members. Both groups often answer questions and actively participate in protocol discussions, particularly pertaining to the launch of V4 — the most recent version of PoolTogether's core offering.

re 'making it' - I think this is like just true parity between people. There is a true sense of shared ownership, responsibility, ability to make changes - that is the end state that we are definitely targeting. And this happens, people come into our Discord and think that people who work for PT don't work there, or do. Some people even have to say "no i don't work for PT". Or people ask to talk to "the team" when I provide answers. (core team)

The community and the core team collaborate on the design of the new version of PoolTogether in their Discord server

The community and the core team collaborate on the design of the new version of PoolTogether in their Discord server

PoolTogether Inc has listened to the community during several pivotal moments of its journey — e.g. when they open sourced the protocol's code and when they re-negotiated VC deals to the benefit of the community (thanks to the core team openly liaising with token holders during the proposal process).

The co-founder of PoolTogether outlines the pathways to full-time employment that he sees in the web3 space.

Case study: PoolTogether's approach to treasury diversification shows the core team's commitment to working alongside the community

An exemplary case of the level of community engagement in governance matters was the decision of the community to diversify its treasury, which was initiated by CEO Leigthon Cusack with PTIP-11. The proposal aimed to diversify a portion of the $POOL treasury (about 5.38% of the total $POOL supply) into USDC, via a direct $POOL acquisition by strategic investors. The deal would include venture funds acquiring tokens at a 35% discount with a one-year lockup. The community did not agree with the proposal and renegotiated the deal on the PT forum.

The proposal was revised through PTIP-13, which incorporated feedback from the community and passed with full support. It reduced the token discount and the total size of the diversification. It also added a European VC (recommended by a community contributor) who agreed to sponsor prize pools.

A screenshot of PTIP-13 on the PoolTogether Discourse forums

A screenshot of PTIP-13 on the PoolTogether Discourse forums

The PoolTogether community’s ability to voice its concerns through the formal governance process — and the openness of the core team to feedback — demonstrates the committed nature of the community and the importance of a functioning, accessible governance process.

3: Focus on social good and financial responsibility

The social good ethos of PoolTogether is another differentiating trait that has helped it attract such a positive community. PoolTogether uniquely positions itself as a friendly onramp into DeFi. It does not feature high-risk pools, and it emphasizes educating users about peer-to-peer finance and helping them find financial stability. As one interviewee put it, "Leighton [PT founder] was really the one that taught me about DeFi. It was a perfect example of 'you're doing it' - that's been my experience from the get go."

This vibe is reflected in the architecture of the Discord, which encourages discussion and contributions related to the PoolTogether's mission. The Discord only has one #help and one #report-scam channels. Unlike other DeFi projects, the PT community hardly discusses $POOL price. There is no #speculation channel — a tactic used by many other crypto Discords to circumscribe all discussion around price into a single channel instead of spamming the platform. "We have built something more around social good and generosity," said one core team member.

Screenshot 2021-11-17 at 12.06.48.png

4: Clearly articulated and accessible governance process

While PT is comparatively a lot smaller and younger than other DAOs, it is doing remarkably well in terms of community participation and proposal activity. In the 7 months since the launch of the PoolTogether Improvement Proposal (PTIP) process, PT has had 25 on-chain proposals, 23 of which passed. Their engagement ratio of 40%, while modest, is among the highest within the web3 space (source: Tally).

How has PT been able to achieve such a relatively high participation rate in such a short time, even according to crypto standards?

The governance framework for making changes to the protocol is clearly outlined in a post that is pinned at the top of the PTIP section of the Discourse forum. A summary of the process is also pinned in the Discord governance channel. The decision flow from Discord to Forum to Proposal is strongly enforced, with proposals "being seeded" in the Discord, then discussed at length in the forum, and culminating with official vote.

Screenshot 2021-11-11 at 17.17.48.png

The proposal interface adds another layer of structure. It guides the kinds of proposals that can be made by presenting the actions one can take in the ABI (Application Binary Interface) in a user-friendly way.

All decisions and conversations are well-documented in the Discord. The information is easily accessible, which helps new members of the community familiarize themselves with the improvement process. To further increase transparency, the community also started a public Trello board that contains the social profiles of all the delegates.

PoolTogether's governance proposal template

PoolTogether's governance proposal template

How PoolTogether community calls work

Another important element of PoolTogether's accessible governance process is the weekly community call. While the calls are generally small (15-30 attendees), they play a big role in bringing together a core set of community members and provide the space to make governance-related decisions together in a synchronous, friendly environment. As one interviewee told us, "the weekly community calls were a window and a way to bring people together, get working groups going".

  • Cadence: Calls happen every Friday, a bot sends an announcement in the #events channel, and the recordings are archived in the #recordings channel. The process of communicating and documenting the calls and inviting the members is almost entirely automated, and developed on a volunteer basis by a community contributor:

    *They were already doing well with their Discord set up - but when I came in I was able to add a bit of a twist that you wouldn't have otherwise. Our events and our recordings channels - upload to Spotify and post them to that channel. Our event posts go through a bot that syncs to a calendar - so when I post an event post for a community call, you don't register for it, it's automatically in your calendar. That's how the whole community keeps track of things. As I started setting up these things - the server mutated into what it is now. *

  • Moderation: Calls are moderated by a few different community members, and the core team is often present. The agenda is posted weekly by co-founder Leighton Cusack in the #announcement channel prior to each call and generally consists of updates, news and a time specifically allocated for governance discussions, often revolving around live proposals or grants follow-ups.

  • Proof-of-participation: At the end of each call, attendees receive POAPs, which provide a proof of a member's participation and are rapidly gaining traction as entry tickets to a job in Web3. (On one of the calls we attended, a participant mentioned that when he applied for a job at a web3 org, the hiring manager looked at his POAP and NFT collection instead of reviewing his resume).

    *Our community calls since we started giving out POAPs the amount of people who attended has skyrocketed. We went from a dozen to 5x that. We get a lot of that beeping nonsense Discord has so we tried using the stages, but it wasn't as open so people couldn't talk to one another. It didn't make for as easy of a flow of conversation that is another thing we all just kind of took for granted. It's the "yes, and!" mentality and we end up finding good resolution because of that. *

PT remains open to improving on their community calls, with members reporting insights from attending other projects' calls.

One of Leighton's weekly posts announcing the agenda for the next community call.

One of Leighton's weekly posts announcing the agenda for the next community call.

A community member posting learnings from attending Compound community call.

A community member posting learnings from attending Compound community call.

Overall, PoolTogether leadership applies some of the best practices for community organization:

  • Transparency of work and discoverability of key information
  • Willingness to learn from, work with, and empower community members
  • Motivational leaders who engage directly with community
  • Socially-oriented, non-extractive mission

Together, these choices have enabled the project to cultivate a positive reputation and a group of highly dedicated contributors. In particular, founder Leighton Cusack drives organizational behavior in this direction:

I think there is a good thesis around this idea that to achieve true decentralization, it always requires the original people to give up a lot of power, usually financially, like Andre launching YFI or Satoshi, or Vitalik giving up more social power [within Ethereum]. I definitely think a lot about how can I creatively give away, and give up personal power or financial power to be able to build something that's decentralized. I have four percent of all $POOL tokens in existence, and I try to think about how could I give those away to serve the ends of decentralization in a way that would actually be effective. I would rather give a lot away and see something become a lot more successful.

For founders, the takeaway is clear: those who desire a welcoming and wholesome community are responsible for personally embodying that culture with their own team and with other members. Leighton's personal interactions with people who report bugs or ask questions shows everyone in the community that nobody is "above" providing support.

However, this commitment to openness has created other ambiguities and tensions that will be discussed in the following section. The blurring of the line between "core" and "community" has occasionally led to misunderstandings over the core team's priorities versus the community's desires. Relatedly, the lack of clear expectation-setting and role definition has led to labor and compensation issues for community members. How can PT preserve all the good will it has cultivated as it scales?

"Go Work for a DAO": PoolTogether and the rise of work opportunities in Web3

A key topic of debate within PoolTogether (and the broader Web3 space) is the question of how to compensate community labor fairly. There is mounting pressure to find answers to this question; community members' expectations are shifting rapidly as they come to understand their contributions as work.

While narratives of organic, voluntary and intrinsically-motivated contributions persist, contributing to DAOs is also increasingly seen as an easy and accessible way to secure initial work experience in DeFi. POAPs, as evidence of these contributions, are now treated as equally if not more important than traditional resumes in hiring processes. As more individuals without any prior crypto experience find their way towards stable employment in DeFi purely through contributing to communities, the meme of "go work for a DAO" is reinforced. PoolTogether's community superusers exemplify this pipeline, with some going on to be hired in full-time roles elsewhere.

Blurring the boundaries between core team and Discord power users

Another indicator of a unique labor situation inside the PoolTogether community is the fact that it is difficult for newcomers distinguish core team members from enthusiastic voluntary contributors — something we experienced ourselves at the outset of our ethnographic observation of the Discord server. In an interview, co-founder Leighton Cusack also recalled new community members informing him that they wanted to speak to "the team" instead of him. In this case, the blurry line between employee and contributor speaks to the openness and seemingly flat hierarchies of the PoolTogether community, where contributions by volunteer contributors are just as valued and visible as those by employees.

DAOs and the unpaid intern problem

But, as in other industries, a lack of clarity around employment status and the normalization of unpaid work tends to become increasingly problematic over time. Community members we interviewed described the problem of fair compensation as one affecting not only PoolTogether, but web3 organizations in general:

DAOs have an intern problem. We think that we've reinvented the business wheel but we've just taken illegal interns so that they can put it on their resume so they can try and get work later… DAOs [expect you to] figure it out on your own, and perform that task really well for a month for free…

PoolTogether's community members and core team have been collaborating to develop solutions to mitigate this "intern problem." At the time of writing, there are four distinct labor compensation models in operation at PoolTogether. In the following sections, these compensation models will be described in turn, with attention to some of the limitations and complications of each.

1: Collab.land and Coordinape: Bias, gaming and capture in tipping practices

The PoolTogether community compensates member contributions by tipping via Collab.Land and Coordinape, two tools favored by a growing number of web3 organizations. Collab.Land has been in use since May, while Coordinape is a recent experiment that started in August. Tipping relies on Collab.Land's Discord bot integration. Members are encouraged to tip each other when they see actions that are appreciated, such as voicing a good idea on a community call or sharing a useful article. Top contributors share small tips with each other and newer contributors almost daily. The Coordinape program works similarly to tipping. Every 2 weeks, PoolTogether allocates 1,000 $POOL tokens to a fund controlled by participating community members, who then pay one another as they see fit. The enthusiastic adoption of Collab.Land and Coordinape has lead to the creation of what one interviewee called a "tipping culture in [the PoolTogether] Discord." This in turn is thought to help to build a desirable culture "over time through positive reinforcement," while also structuring engagements in a way that is conducive to organic, initiative-driven contributions: "That's the reason for Coordinape and Collab.Land… you can do whatever you want as a contributor, there's no set time, there's no one forcing you to do stuff."

PoolTogether tipping culture

However, there are three key inefficiencies that currently prevent Collab.Land and Coordinape from facilitating fair compensation: visibility bias, tip gaming and tip capture.

Visibility bias: highly visible contributors tend to be tipped better

By visibility bias, we mean the tendency for contributors to receive more tips the more visible their contributions are to the average Discord user. As one interviewee stressed: "it is the most visible people... that make the most money. Not the most active or helpful people, but the most visible." Another interviewee recalled being "overcompensated" after making the high-visibility contribution of putting together a PTIP: "It was just a flood of $POOL." A contributor that helps run a community call will be more visible, and more likely to be compensated through tips, than a contributor who helps translate documentation for non-English speaking user subcommunities, for example. In this way, visibility becomes an imperfect proxy for valuable community contributions.

Tip Gaming: anyone can learn to game tipping practices by spending enough time in the Discord

In online communities, when "rewarded activities are imperfect proxies for the behaviors that the community really wants to encourage," members may be tempted to game the rewards system by taking actions that are "rewarded but not actually valuable" (Kraut et al. 2012, p.53). This is reflected in the potential for tip gaming in the PoolTogether community. In theory, the risk of tip gaming should be relatively low, because there is no formalized set of eligibility criteria for rewards — members simply tip for contributions that they think are good on a case-by-case basis. "Nontransparency and unpredictability" make rewards gaming more difficult "especially if the rewards are only of moderate value" (Kraut et al. 2012, p.57). In practice, however, it does not take long for a newcomer to learn the types of behavior that are more likely to receive tips simply by observing. The longer one spends in a community, the more transparent and predictable tipping patterns will become, making them easier to game. This in turn allows members to decide how to contribute next based on the likelihood of being tipped, rather than on the basis of what would be most valuable to the community. An awareness of these possibilities is reflected in one interviewee's explanation of their approach to engaging with the PoolTogether community:

I have gotten more from speaking during a good community call and people directly tipping me than [via] Coordinape… [For] the first round I only got 2-3 $POOL tokens…From just talking in calls I'm getting tipped 2-3 $POOL per call, for just being active in the community.

Tip Capture: early contributors tend to "whale" tips, while newer contributors may be compensated less

The subgroup of the PoolTogether community that arguably benefits the most from tipping allocation inefficiencies are long-time superusers, through a form of path-dependent tip capture. Members who develop a reputation for making high-visibility contributions are more likely to be tipped, even after their activity and contributions decreases. The result is a core group of "tip whales" who are themselves aware that they are being excessively compensated:

I end up being more visible as the Discord guy. There should be a point when they pull me out of that system. At one point I was receiving 40 percent of the GIVE… Long term, you're going to need to pull out the people who are [earning] consistently, because you need that to go to the new people. The older generation of people are whaling that.

By the same measure, newcomers who are making valuable but low visibility contributions will struggle the most to gain adequate compensation from the community. As one interviewee clearly noted: "I feel there's still a bit of boys-clubbiness to it. It's harder for newer people to be involved… [even if their] work is more needed right now."

2: PoolGrants: The perils of a 'state your terms' approach

Service agreements in the PoolTogether universe take place through the PoolGrants program. A proposal is made to the grants committee, and if approved, is funded. Depending on the size of the budget, fees are paid either up front, or 50% up front and 50% on completion. The grant proposal itself, agreed on between the grantee and the committee, substitutes for a lightweight contract. When the project is concluded, the grants committee conducts a debrief on its effectiveness.

Interviewees described examples of grants given by PoolTogether positively, including "blockchain clubs at schools, people doing grants for translations to the protocol, people making videos and dashboards." The PoolTogether pods for the r/EthFinance and Bankless DAO communities created by one contributor were also mentioned by fellow community members as successful projects made possible through PoolGrants. Interviewees agreed that "the most accessible way for people to access compensation right now is through grants," a statement that holds true for many other DAOs. But while grant programs offer a well-established and functional compensation model for PoolTogether and DAOs generally, they also come with inherent limitations.

Only a limited range of projects are actually suited to funding via grants

Grants are appropriate compensation models for projects that are concrete, time-limited and/or once-off initiatives. Member contributions that fall outside these criteria, especially regular and ongoing contributions that are more job-like than project-like, but still funded through a grants program, are characterized by inconsistency: "I don't know if I'd ever be able to truly feel comfortable in a setting where I'm required to consistently reapply for my job." While it is debatable whether community members should think of grant-funded projects as their "job" in the first place, smaller, ongoing contributions to a DAO are arguably not well-suited to compensation through grants, regardless of how they are labelled. This may become increasingly problematic, as these are precisely the kinds of tasks required for maintenance of a protocol and its community.

Compensation through grants programs depends on the contributor's ability to demand payment

A further issue arises out of the way that the task of defining appropriate compensation is outsourced to community members, who may lack the knowledge and resources to fairly price their own labor. In a discussion in the server on this topic, one community member expressed discomfort at the way that "the financial side is tied to what I ask for, because I know I won't value myself fairly compared to the outrageous numbers in the DeFi space...The DAO proposal/grant system… is ripe for abuse with the way it relies on 'state your terms' principles". This is a significant barrier for contributors who might attempt to apply for retroactive compensation via the governance forum in the form of a PTIP, as well as for those contributors who are scoping out a new contribution. By contrast, contributors who are more comfortable with and confident in asking for (larger sums) of money are more likely to receive adequate compensation and benefit from grants programs more broadly.

The necessary conditions for proactive, successful grant projects are not well understood

A broader challenge faced by PoolGrants programs is the difficulty of harnessing community members' sense of initiative and facilitating proactive contributions in a systematic manner. Interviewees described successful grant-funded projects as something of a black box — while the outcome was met with excitement, the underlying process was taken as solely dependent on contributors’ skillset and sense of initiative:

There [should] be more people that proactively start working on things. Sometimes people take the initiative, and it turns out amazing.

He basically just came up with that idea and came up with it all by himself and it was awesome. If we can find a way to encourage that kind of contribution more, that would be great.

There is a clear understanding of the types of proactive contributions that are desirable. But when it comes to encouraging more of these projects, PoolGrants has faced difficulties. This was seen in the "microgrants" initiative that was developed in an attempt to bridge the gap between the grants program and smaller, non-typical community member contributions. Microgrants were intended to encourage short-term, smaller contributions with a budget under $1000USD, such as promoting PoolTogether on social media channels. However, as interviewees noted, microgrants did not take off within the community and failed to "generate [the] creative ideas" among community members that its initiators had hoped for.

Proactively initiated, effective grant-funded projects are not some kind of miracle. As in other organizational settings, there are always identifiable contributing factors that can make or break a project. One might ask whether there is a causal relationship between the lack of proactive, initiative-taking grant proposals, and the uncertainty around project scope, valuation and "job" security that community members face.

3: Ops Teams: A skilled labor shortage inside PoolTogether?

PoolTogether Prize pools require ongoing lightweight maintenance of certain smart contracts, such as the Chainlink Keeper contracts into which $LINK must be deposited to keep prizes awarded on a regular basis. The PoolTogether Inc. team has created two Operations Teams for Ethereum and Polygon to execute these essential tasks in the lead-up to their automation. In theory, managing such operations teams shouldn't pose too many issues. However, PoolTogether faces a unique challenge.

PoolTogether doesn't (yet) attract experienced developers to its community

PoolTogether is a protocol that targets "crypto-beginners" as part of its positioning as an on-ramp to DeFi, but it also maintains a complex infrastructure that would benefit from the support and contributions of technically literate and skilled community members. This paradox was underlined in the comments of a core team member:

The two operations teams are intended to transfer the control of the protocol to these users, who I presumed to be superusers. But we also brought in a lot of new people, crypto-beginners [because of] our intention to expose them to DeFi in the simplest and safest way possible. I feel there is a lack of skill sets in the community. I would love our community's users to be developers and more professional.

Knowledge asymmetries between the core team and technical contributors are difficult to bridge

This in turn has resulted in knowledge asymmetries between PoolTogether's core team and ops teams, which may create barriers for effective teamwork:

A lot don't know how it works under the hood… It takes a lot of work to explain all these realities to these people. You have to engage with them to move this capital.

Unclear expectations around decision-making powers can frustrate technical contributors

A further challenge for PoolTogether's ops team stems from confusion around expectations of the governance role held by members of the ops team within the domains in which they work. For example, a core team member's decision to change the quorum from 4/6 to 2/6 for the multisig managed by the Ethereum ops team, ops team members expressed confusion as to why this was permitted to happen without their knowledge. On one hand, increased automation in the management of ops teams' activities would certainly be desirable from the perspective of efficiency. On the other hand, ops team members may also desire a certain level of agency and responsibility in decisions within the domain of operations, which might in turn inspire greater commitment, engagement and better performance in their roles.

4: The HR SubDAO: Applying lessons in Human Resources from PoolGrants

In pursuit of addressing these issues, the potential for a "human resources sub-DAO" has been discussed by PoolTogether Inc and core community members. Separately scoped from PoolGrants, this DAO "would have a narrowly defined focus of paying salaries for participating members" such as grants reviewers, community managers, and multisig executors.

The HR Subdao

Challenges that the HR subDAO might try to solve include how to structure part-time and full-time employment at PoolTogether so as to offer genuine job security and financial stability. As one interviewee put it:

Coordinape is an amazing long term solution, but I can't show that to my landlord [as income]… If DAOS are the new companies then they should be able to employ people properly.

An early idea was an "executive council" composed of PoolTogether Inc employees and community. The council might post open roles on the governance forum and go through formal hiring processes with applicants. In doing so, this new "HR subdao" would provide clear pathways for casual contributors to become part-time or full-time employees of PoolTogether Inc or of the protocol itself. First steps toward this include a chart of "Key Protocol Contributors" and their core skill sets, made by the core team.

It remains to be seen whether PoolTogether will try to implement an HR sub-DAO. If the community goes forward with this proposal, here are a few of the key challenges they might face:

Differing perspectives on compensation could make it difficult to reach consensus around the HR subDAO's design

A key challenge of the HR subDAO will be finding its position amid diverging views within the PoolTogether community (and in DeFi as a whole) on what types of contributions deserve compensation, and how they should be compensated. To do so, it is helpful to look back at the impetus for the creation of the HR subDAO, namely, conflicts around labor and compensation within the PoolGrants team. A disagreement around the amount of hours that a community member was billing for administrative tasks sparked a broader discussion around labor and fair compensation. One interviewee summed up the different perspectives in this debate as follows:

I think there are very different viewpoints. Everyone agrees that contribution needs to be rewarded, and there are so many opportunities out there and some people really need the money and if there are no incentives they can easily contribute somewhere else. The data viewpoint, and this is the view that I share in part, is that without contribution there can't be any reward. What I like to see is people do something without permission and then if the community loves it then it will be taken care of. There will be a reward if you contribute. There isn't a need to beg for a salary.

As with PoolGrants, contributions that are proactive and initiative-taking seem to be valued more, while formalized work agreements are seen as more troublesome:

The risk if you have someone on payroll is that they start to become lazy.

Further differences in perspective that were raised by the compensation debate concerned the ways to value technical or "hard" labor vs social, interpersonal, affective or "soft" labor. There is a place for both types of labor, and indeed both are necessary. But "soft" contributions may be valued less, if understood to be not as fundamental to contributions that maintain and improve the protocol.

Should the community managers get paid? Of course. Should they be getting paid more than the developers? No, they shouldn't get paid as much. They are valuable but there wouldn't be a community without the protocol itself.

High transparency, combined with a lack of HR structures, can undermine employees' sense of job security and workplace trust

The design principles of maintaining transparency and 'working in public' is popular among DAOs. But the messy resolution of the previously mentioned PoolGrants compensation issue highlights an important drawback to this approach that the HR subDAO might seek to also address. When accepting a position of employment, DAO contributors must also come to terms with the fact that their activities and performance can be scrutinized by fellow community members. They may even be fired from their role as a result of a public deliberation process. Additionally, as was the case within PoolGrants, the lack of formal mediation and conflict resolution process, such as those developed for traditional HR contexts, may leave employees feeling vulnerable, attacked and overexposed. Without such structures to guide them, DAO conflicts may be driven by emotion and personality clashes:

When you get into a small group of dedicated people, in a strictly virtual space… Everyone is in this mindset of transparency, clarity… [But] the clash of personalities is a potentially a big factor that isn't discussed as much as it should be.

There needs to be a way to decentralize conflict resolution… there needs to be a route that we address that as a DeFi and a DAO space.

This high degree of transparency and lack of HR guardrails not only makes employment at a DAO an unappealing prospect when compared to working for traditional organizations. It may also undermine contributors' sense of job security, which in turn can negatively impact their engagement, performance, creativity and risk-taking—all of which are crucial for fostering innovation within organizations.

The HR subDAO is a time-sensitive project as DAOs increasingly compete for human capital

To improve on current processes, it will be crucial to design an HR subDAO that is agile enough to identify and harness the energy and initiative of contributors, whether they are old or new members of the PoolTogether community. Several interviewees lamented the way in which PoolTogether failed to hire one of its most talented and active community contributors:

A week or two ago he started a job at [another protocol]. That's kind of a lost opportunity, PoolTogether should have hired him instead… because he's more involved in PoolTogether. [But the other protocol] went to him and made a big offer he couldn't say no to.

As DAO contributors professionalize, develop valued technical and non-technical skills and expand their work experience, protocols may find themselves competing for talented individuals, particularly as the cost of switching projects in crypto is low. These contributors in turn may expect more reliable forms of compensation, more extensive benefits and perks, along with gig and creator economy levels of flexibility. Above all, protocols like PoolTogether may need to become more comfortable with putting more funds from their treasuries towards compensating their contributors. As one interviewee put it:

A bunch of protocols are sitting on war chests of treasuries that the DAO is supposed to use. [But] has there ever been a case where a DAO has said we should go pay the team more? I don't think there has been a case like that.

"Community" contains multitudes: how should PoolTogether make sense of its diverse constituency?

While most crypto protocols understand the need for a broad base of holders and participants, referring to all these users as one "community" can be misleading. Even within PoolTogether Inc, there are differing views on the role of the PoolTogether community. Some view the community to be a self-organizing marketing tool: making memes, showcasing passion, and recruiting new users and tokenholders. From this perspective, said one contributor, "community is great, but they are armchair critics and meme creators." PoolTogether Inc are the "adults in the room," and community members are "casuals" who lack relevant professional skillsets and or technical competency. These team members expressed high standards for a "meaningful" contribution.

For the time being it's much better to have full timers - especially from a business standpoint. If you wanted someone to pursue partnerships, you cant hire a freelance person, you have to know the stack deeply to coordinate with people. (core team member)

Others within the core team view the community in its current form as already intrinsically valuable, citing the community's importance in securing a fundraise on better terms as a positive outcome. Other community-driven initiatives, such as introducing Coordinape, serve as positive examples of what happens when a team decentralizes power.

This difference in views reflects different priorities within PoolTogether Inc, but also a lack of internal alignment on what kind of contributions are valuable to begin with. In our view, this indeterminacy is one reason for the compensation issues and misunderstandings between core team and PoolTogether's contributors. On the one hand, PoolTogether Inc advertises its openness and actively encourages new contributions of all kinds. On the other, the team's main mental models for valuing and recruiting labor are based on technical contributions and business objectives. This is why it was possible for a prominent community manager working nearly full time for free to be poached by another protocol.

Beyond this, PoolTogether Inc has not defined quality standards or success metrics for contribution types. Without these standards, community members have sometimes opted into tasks they are not qualified for, occasionally proposing partnerships or untimely tokenomic redesigns that do not drive protocol growth.

As a first step towards resolving these challenges, we propose that PoolTogether needs three distinct community constituencies to grow adoption: believers, governance practitioners, and developers. In order to perform their best, each contributor type needs a different labor model.

1: Believers — contributors who generate goodwill and maintain a welcoming, positive environment. This set of contributors most closely resembles a fandom or online brand community. But how should they be rewarded for their activities? Fan activity is notoriously hard to value and reward because much of it is aggregate behavior by a "long tail" of participants who are semi-active in social media spaces. These contributions are generally closely aligned with branding, marketing and other organizational culture initiatives within traditional contexts (such as raising awareness through partnerships, publicity stunts and social media, referrals and evangelizing, producing educational content across different media formats, memes, etc.) While these contributions are often ephemeral, the value they generate is indisputable. This work is key from an infrastructural standpoint, since it fosters internal cohesion and long-term commitment on the part of members.

Contribution reward model: The generous tipping culture already present in PoolTogether provides a strong foundation for letting this community of fans award one another rewards in a peer-to-peer way. To grow this peer-to-peer believer economy, highly active participants could be granted regular, modest allowances of tokens with the expectation that they would disperse them to other believers as a form of encouragement. It should be noted, however, that some challenges remain. Should PoolTogether grow significantly, retaining its culture of open and positive vibes may prove difficult.

2: Governance practitioners — tokenholders and users with an entrepreneurial mindset and enough technical literacy to see strategic opportunities for treasury deployment or tokenomic improvements. As many projects are discovering, governance participants need high context, tokenomic acumen, and/or technical capability in order to make high-leverage governance proposals. Governance proposals by small-time tokenholders are often unhelpful, underdefined, or otherwise lack credibility. In PoolTogether, most proposals make it to the highest stage of formality and are approved in a vote. However, this doesn't mean they contribute meaningfully to PT growth. In some cases, proposals seemed to be tolerated by the core team rather than supported enthusiastically. An exemplary case was PTIP-8, which proposed the creation of a NFT prize pool which would require significant technical buildout. While the proposal passed, the initiative failed to gain traction, due to the lack of social support by the core team.

In the context of traditional corporate governance, the role of governance practitioner would be taken up by executive employees, investors, or board members. But in crypto, there is an intrinsic tension between the need of a core team to hire capable people, and the need to maintain the optics of decentralized governance for securities compliance. Recent proposals for "governance mining" rehearse the need for this kind of participation, but do not solve the fundamental problem of attracting qualified participants.

Contribution reward model: PoolTogther should create dedicated programs to attract competent governance practitioners. Said programs should be positioned differently than a grants program, and should offer significantly higher token grants and stablecoin compensation. Whether legally incorporated as a new entity or an informal committee, talented people who can operate the program must be acquired, trained, and retained. (Venture capital may be one pool of talent to draw from here.) The program itself must have clear KPIs and targets for protocol growth, ideally with participant rewards conditioned on attaining said targets.

3. Developers — technical community members who integrate the PT protocol into their own applications and services, build new frontends, and create pools for their own communities. To date, PoolTogether Inc and community members have used tokenomics to grow protocol adoption. Token incentives for sponsors and savers alone, however, haven't been enough to grow the protocol as quickly as PoolTogether Inc would like. Instead of growing a community of contributors and developers, $POOL has been dripped to sponsors who have aggressively yield-farmed the token, then left. In pursuit of a solution, PoolTogether Inc recently proposed to move to Olympus-style bonding rewards. However, we see potential for an alternative growth strategy focused on rewarding app developers who use create dedicated pools for their own communities.

Contribution reward model: Of the three community constituencies, app developers are the most amenable to a form of automated incentives. Apps and integrations that drive new volume might be rewarded with a proportional amount of $POOL automatically sent to a specified proxy address. Instead of direct payments for liquidity, "developer mining" puts the onus of driving new liquidity on parties who can generate value propositions specific to their own networks. Such a major upgrade to PoolTogether's incentive structure would require thoughtful tokenomic design. In addition, investment in product marketing, improved documentation, and developer outreach and evangelism would be required to support this initiative. Despite these requirements, we see it being one of the highest potential impact areas for PoolTogether's expansion.

For now, PoolTogether should not focus its energies on cultivating a group of open source contributors. Documentation contributors might help, but when it comes to contributions to the protocol itself, it is hard to beat the momentum and context provided by the core team. This may change as a community of integrators grows.

Even if PoolTogether begins to experiment with more structured employment contracts, the broader "community" of contributors can't and shouldn't be disregarded. Crypto is as much a social phenomenon as a financial one, and the vitality of this "community" is central to the success of any protocol. Some community members may prefer more traditional models of compensation, but there will always be those who want to show up and participate on a more informal basis. And there are also vast numbers of participants who feel intrinsically motivated by the mission of the community they serve. Protocols like PoolTogether should leave room for this type of contribution even as they begin to develop more well-defined pathways to employment.

Community cartography

There's no perfect historical analogy or precedent for the kind of organization that PoolTogether is trying to put together. In this embryonic stage, it’s important to embrace the multiplicity of metaphors that community members employ in order to make sense of what they're participating in. Each metaphor has its own affordances, its own implications for governance, its own world of roles and ways to "plug in."

On the surface, the PoolTogether community looks like a list of channels on Discord and discussions on Discourse. But in the visual imaginations of members, the "shape" of PT's network takes on new and unexpected forms. These metaphorical shapes — which often remain implicit — can be used to design novel organizational structures that feel unique and true to PoolTogether's ethos. Not all org charts have to look like "trees", and not all hiring processes have to look like "pipelines". During our research, we asked PT contributors to externalize their mental maps of the community. What would it look like if it took on physical form? Here are some of the metaphors we received:

  • A city-state with a cathedral (the protocol) at the center
  • International Space Station with modules that dock with the central hub (Discord and Governance forum)
  • A series of concentric circles, each a little more removed than the last
  • A continent with a number of connected but disparate tribal groups
  • An octopus where the head is PoolTogether Inc and the arms are the various sub-teams
  • A fly-wheel rolling down a hill, collecting new community members as it goes


Each of these metaphors implies a different organizational structure. Are we looking at something that's modeled after a company with employees, managers, HR? Or a civic organization with voluntary contributors who engage in acts of public service? Or a religious organization with worshipers and evangelizers who offer tithes to grow the community?

Towards a Symbiotic Work Environment

What happens when the old ways of organizing labor get set aside and replaced with something new? PoolTogether and others are in the process of finding the “babies” that got thrown out with the bathwater. They're learning from experience why older org structures were devised in the first place. Sometimes it's difficult to tell what function a particular system was serving until after it gets removed. In its absence, you can better understand its purpose. To fill the void, you re-invent the wheel — and that's not always a bad thing. You learn how (and why) it was originally designed. You make improvements. You translate the old designs into the language of the new technics that surround you in the present.

Along the way, PoolTogether has managed to cultivate a very active and positive community. Their problems are good ones to have: how to compensate high-quality contributions, how to incentivize even more integrations, how to maintain a wholesome atmosphere in the face of rapid growth, how to make sense of the many different constituencies that exist within the community. Solutions to the challenges outlined in this report will borrow and remix from what came before, while recognizing the unique qualities of the organization that PoolTogether is trying to create. Contributors don’t fit neatly into the categories that are currently recognized by the current legal system. After speaking with community members of many different backgrounds, it's clear that setting straightforward expectations around compensation is just as important for protocols as for traditional co-operatives, non-profits, and corporations. As PoolTogether continues to pioneer new ways of organizing creative production, it will be of utmost importance to ensure that work arrangements are symbiotic for all parties involved.

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