One of the primary responsibilities of the Saturn DAO is to govern the Saturn Protocol and allocate its capital in a way that maximizes its growth and profitability. There are, effectively, three ways that the DAO can spend some of the Ether and crypto tokens on its balance sheet: pay out dividends to all its stakeholders, make one-time payments for certain proposals, and streaming payments. This article covers the latter.
Why streaming payments
While some types of work demand the payment to be done upfront in a lump sum, e.g. you need to have the tokens on hand in order to do an airdrop marketing campaign, there are other types of work that require a longer term commitment. It can be hosting full nodes and servers for the blockchain network and for Saturn Rings, or community management work on discord, reddit and other social services, or perhaps a blog that talks about crypto and promotes Saturn Protocol.
These types of engagements look less like contract work, and more like a full time job - you are effectively working for the DAO. In the offline world, compensation for a job is usually done via a paycheck, the company and the employee negotiate a certain nominal hourly rate, and the company sends out monthly or biweekly paychecks.
Cryptocurrencies, almost by definition, have the functionality to send money, and thus the lump-sum, contract-type payments are natively supported. However, nothing like a paycheck exists in most blockchain networks. Luckily, the EVM chains such as Ethereum have smart contracts, so we can program a blockchain paycheck protocol, which we call Streaming Payments.
How streaming payments work
Functionality and mechanism of streaming payments are best described by example. Suppose there is a community website that the DAO thinks is valuable, e.g. Saturn Tools - a website that shows realtime statistics of Saturn Protocol usage. The owners of the website may submit a proposal, saying they need 100 USDT a month for 12 months to cover the costs of running the servers and blockchain full nodes. Instead of asking for a one-time $1200 payment they opt for a streaming payment, and let's say the DAO votes to approve this expense. What happens next?
After the vote is approved, the DAO smart contract automatically creates a new multisig wallet and puts the whole payment amount into it. There are two admins of this wallet - the DAO, who acts as the payer, and the website owners who are the DAO employees under this arrangement. Having the full sum of money allocated to the multisig acts as a guarantee and assurance for the worker - they can rest assured that if they do their job and the DAO is happy with their work they will get paid.
As soon as this multisig is created, it starts a countdown until expiration, in this case 12 months. Internally, the multisig keeps track of two numbers: earned value and to be earned. Just like with a normal job you don't ask your company to just pay you for the whole year right away, similarly with streaming payments the worker is only entitled to the portion of the money that they have earned.
At any time, the worker can call the
claim method on the multisig smart contract and withdraw the money from the earned value pool. They are in full control of how frequently they want to do it - withdraw 100 USDT every month or 3.333 USDT every day.
In order to fully cover the remaining functionality, let's imagine the case where the worker does not perform its duties well and the DAO wants to fire them. In that case, the DAO, as the second owner of the streaming payment multisig wallet, can call another vote to terminate this contract. If the vote passes, all funds remaining in the to be earned pool get transferred back to the DAO, and the worker is no longer expected to perform their services. Everything in the earned value pool, however, still rightfully belongs to the worker, as it is their wage properly prorated until the very second they got fired by the DAO.
In summary, streaming payments are a simple mechanism that allows the DAO to hire workers to perform services for the DAOs benefit. They represent the blockchain version of regular paychecks, and they properly balance the incentives of the DAO and its workers and provide peace of mind for both. Workers are guaranteed that the DAO will pay them for every second of their contract. The DAO knows that it has the nuclear option of firing the worker in case they do not do their job properly and can return the unspent funds. This mechanism ensures the alignment of interests and will increase the success rate of the jobs done via Saturn Governance.
Future is bright, time to HODL!
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