An Allocation Strategy that Prioritizes Your DAO’s Top Builders: “Contribution Weighting”

One of the biggest challenges for DAOs is finding a fair and effective way to handle contributor rewards. Traditional methods—like biweekly peer reviews—can often replicate the least enjoyable aspects of conventional jobs. By contrast, Flow State offers Contribution Weighting, a real-time, flexible alternative that continuously aligns rewards with contributions, avoiding the pitfalls of frequent review cycles or overly flat distribution models.

Why Contribution Weighting?
How Contributor Weighting Works
Example: Contributor Weighting in Action
Contribution Legend (Sample)
Contributors and Their Points
Flow Per Second and Point Conversion
Real-Time Distribution
Comparison with RPGF (another way to reward contributors to an ecosystem)
Suggestion: Implement Point Decay to Encourage New Contributions

Why Contribution Weighting?

Contribution Weighting is designed to address these issues:

Move Beyond Endless Peer Reviews: Many DAO tools, like Coordinape, depend on weekly or biweekly peer reviews to distribute payments to contributors, which can feel burdensome and bureaucratic. Flow State makes it easy to continuously reward contributors, and you can decide how and how often you distribute merit and ultimately allocation share to contributors.
Ensure Fair, Merit-Based Rewards: Equal pay for all contributors (e.g., through Equal Split Allocation) sounds fair but can be discouraging when contributions vary in impact. Contributor Weighting assigns value based on specific actions, making sure high-impact work is fairly rewarded.
Build Contributory Reputation Over Time: Inspired by GOVRN’s approach to contributory reputation, Flow State emphasizes building a visible track record of valuable work, giving long-term contributors and newcomers alike a clear path to recognition.

How Contributor Weighting Works

Each DAO to create a custom “legend,” mapping specific contributions to reward points. Here’s how it might look:

The DAO decides on a merit system: DAOs define what actions earn points. For instance, referring a new builder to the guild might earn 10 points, delivering a key project could earn 50, and attending a digital event might grant 3. The point system, validated by trusted DAO processes, ensures contributors are rewarded in line with the community’s values and priorities.
Flow State intakes these points on some regular basis (e.g. a daily-run script takes in data from a Google Sheet) and distributes funding in real time to people based on some agreed upon algorithm for turning points into realtime allocation.

Example: Contributor Weighting in Action

Let’s break down how Contributor Weighting could work in practice with a sample “legend,” three contributors, and a real-time funding flow.

Contribution Legend (Sample)

The DAO agrees on the following legend to map contributions to points, reflecting priorities and values:

Referral of a New Builder: 10 points
Delivery of a Key Project: 50 points
Attendance at a Digital Event: 3 points

This legend will guide the assignment of points to contributors based on their activities, validated by the DAO’s processes. It can be updated regularly to stay relevant to the DAO’s evolving goals.

Contributors and Their Points

Based on recent contributions, here’s a snapshot of the points assigned to three contributors:

Alice: Referred two new builders and completed one key project.

Referral (10 points x 2) = 20 points
Key Project (50 points) = 50 points
Total Points: 70

Bob: Attended three digital events and completed one key project.

Event Attendance (3 points x 3) = 9 points
Key Project (50 points) = 50 points
Total Points: 59

Charlie: Attended five digital events.

Event Attendance (3 points x 5) = 15 points
Total Points: 15

Flow Per Second and Point Conversion

Assume the DAO has allocated a total of 100 tokens per second to be streamed to contributors, with each contributor's share based on their accumulated points.

Calculate Total Points:

Total points across all contributors = 
70 (Alice) + 59 (Bob) + 15 (Charlie) = 144 points.

Determine Allocation Ratios:

Alice: 
70/144 ≈ 48.61%

Bob: 
59/144 ≈ 40.97%

Charlie: 
15/144 ≈ 10.42%

Calculate Tokens Per Second for Each Contributor:

Alice: 
100 × 0.4861 ≈ 48.61 tokens per second

Bob:
100 × 0.4097 ≈ 40.97 tokens per second

Charlie:
100 × 0.1042 ≈ 10.42 tokens per second

Real-Time Distribution

With these calculations, Flow State will distribute tokens to each contributor in real-time based on their points:

Alice will receive 48.61 tokens per second.
Bob will receive 40.97 tokens per second.
Charlie will receive 10.42 tokens per second.

The Contribution Weighting strategy, supported by Flow State, ensures that each contributor’s rewards reflect their real-time contributions, with allocations that update as new points are assigned or validated. This keeps the system fair, adaptive, and aligned with the DAO’s priorities.

Comparison with RPGF (another way to reward contributors to an ecosystem)

Unlike Retroactive Public Goods Funding (RPGF), which distributes funding at fixed intervals, Flow State’s Contributor Weighting minimizes frustration over quarterly allocation decisions. By showing exactly why a person receives funding in real-time, Flow State builds transparency and reduces the need for periodic debate.

With Contributor Weighting, DAOs can modify their legend in real-time, allowing the reward model to evolve alongside the DAO. Contributors aren’t locked into outdated models—they benefit from an adaptable approach that responds to the community’s needs and feedback.

Suggestion: Implement Point Decay to Encourage New Contributions

To keep reward systems fair and dynamic, DAOs can adopt point decay in Contribution Weighting. Point decay reduces the value of older contributions over time, ensuring that early contributions don’t overshadow newer ones. By implementing a steady decay rate, DAOs motivate ongoing engagement, balancing long-term commitment with current contributions, and aligning rewards with the community’s evolving needs.

For a more detailed overview, see the full document on Implementing Point Decay in Contribution Weighting.

By adopting Contribution Weighting, Flow State enables DAOs to reward contributors fairly, transparently, and instantly. This approach nurtures ecosystems where contributions and recognition flow in tandem, avoiding the burnout of traditional models and embracing a dynamic, community-driven future.