When to Pay: The Economics and Psychology of Community Building

Transcript

hello hello we're running a little bit late so i will get started soon-ish maybe right now i'll just talk really loud so networking people are forced to sit down hello so my name is clayton roche i'm the community lead at uma um i'm curious here if there's anyone in the room that is like also a community manager in a dao or kind of plays that sort of role i can't actually see people i see one two three four five awesome can people hear me okay cool so one type of topic i'm going to focus on here is on intrinsic versus extrinsic

motivation um intrinsic motivation i think people basically understand it's doing something because it's rewarding for its own purpose extrinsic motivation is doing something because it leads to a separable outcome this debate around intrinsic versus extrinsic can confuse people sometimes because because most things are a mix but i just want you to remember this piece the separable outcome if you can identify an outcome that's external to the internal feelings that's an extrinsic motivation and so we're going to talk about this in the context of community building in daos so i'm going to talk about a some

behavioral economic studies that have been done um so there's a few steps here if you give children games they play the games that's like fairly obvious right there's an intrinsic motivation to play a game oops i went too fast okay if you give children money in games they'll play the games right no surprise there there's this kind of dilemma between intrinsic and extrinsic motivations extrinsic motivators can actually squish intrinsic motivation if you give kids money to play games and then you stop giving them money

they actually play less right than the kids who were never given money to begin with and what this reveals is that paying someone to do something they find inherently rewarding can actually make them do it less and what's important about this for daos is because of course we want to incentivize people to do cool things in communities to be lovely but if you start paying them to do stuff they already wanted to do you can actually have a negative outcome same thing with reading so they've done studies where they paid kids to read and they read more but then they stopped paying them and they read less so you can't pay kids to learn how to love to

read and that's really the crux of it so at uma we ask the same question right we we have developers and we have um networkers in the community we can pay them money to do stuff with uma they build stuff we pay them they build stuff however if we pay them to build stuff do they love uma that's that's the open question right and that's something that we're going to focus on here so to come back to this intrinsic versus extrinsic motivation when you're incentivizing your community there are certain types of tasks that are just like kind of boring right like there's not a lot of intrinsic motivation to like arranging these chairs back up in line i don't expect

people to just do it out of the sheer joy after they leave the room so you might need to pay for that however some things are just fun right away if you go into a discord and you incentivize people to be friendly like maybe that'll work but it's also like kind of weird right people might just want to be friendly because they want to be a nice person what's cool though is that something that's dull and challenging can actually become fun when you're skilled at it and so like we saw this in uma with governance with governance proposals for example it was difficult and challenging and sometimes a little bit boring but after people had done a few of them

they became subject matter experts and they were able to help other people who showed up in the community and needed this service and they were able to offer their knowledge and they found that rewarding so you become this person that you are that's uniquely capable of helping others this is a quote from adam smith that i've always liked man actually desires not only to be loved but to be lovely um so i want to ask the audience here if someone in the community is freely helpful maybe they share links or they tell someone how to set up their wallet is that because of intrinsic motivation or extrinsic motivation so people who

think it's intrinsic raise your hand okay how about extrinsic extrinsic motivation all right i think if we did the vote the other direction we'd had more people the first time because i think they were shy um it's a mix right it's a bit of a mix and and you'd have to look into their heads to know exactly you know are they there because they they think they're going to get an olympus airdrop because they're in the discord or are they there because they want to be a helpful person and build the future of finance so the the kind of v0 for community building is you give out rewards to get people to do cool things that's v0 right pay people for outcomes

but there's a lot of cool alternatives that don't squash that intrinsic motivation and that's the thing you want to avoid so different alternatives include things like gratitude literally just acknowledging someone's contribution bonuses and unexpected rewards can be great and what's cool about that is imagine someone shows up and they do something beautiful they're nice to somebody they help achieve an outcome then you give them a reward after and so not only did they do it for intrinsic reasons and they get to feel like a good person who's helpful they also got that reward and so the layers of motivation going on there end up being a lot more powerful than if you had paid them to do the

thing in the beginning um let's see other other angles here are um yeah rules and responsibility is another one right and this one we're generally familiar with if somebody's in a community and you offer them a role whether it's a moderator or developer support something like that you might offer compensation but the role itself ends up being a certain type of reward and they get to feel proud of offering that service to people so that's an alternative to just simply paying for something so i want to talk a bit about like i want to remind people that even though i'm talking about maybe not paying for certain things crypto economics are certainly important uh it's like what it's the glue that

holds bitcoin together right it's it's uh financial incentives so at uma we need crypto economics like our literal protocol and oracle is built on um on incentives and economics and what's cool about community building what i like about it is it exists at the intersection of pure crypto economic incentives like keeper bots are doing liquidations for ave or maker dow to keep the protocol liquid and pure-hearted intentions to contribute because if you've ever hung out in a dow or in a community people are in there because they like it like some of them are getting rich and that's cool or they're earning an income and that's cool but they're in it

because they like it um this quote stood out to me autonomy supportive teachers um discover great greater intrinsic motivation and the reason that i highlighted this quote um from this researcher is basically this piece about autonomy and this is something that we're going through in our community right now we have a group of superhumans they're called and they are sort of wrestling for greater autonomy right now and uh i'm just i'm just seeing it firsthand that when you give a group of people you sort of like trust them with something you trust them with the responsibility to control outcomes into

to control the way it goes in fact actually i'm curious who here has ever had a micromanaging boss that tells you how to do everything and takes credit for everything you did i'm seeing some enthusiastic hands in the air um it's kind of the same idea right like it's really annoying to have someone telling you how to do every little thing and it's also annoying because you don't get to feel proud because you affected the outcome yourself and that's what that's what i find in my experience here with with community building is like another way to reward people is not just with paying people it's also just acknowledging that they're effective and doing that acknowledgement with more than just words but giving them

responsibility and control um so when you do that when you give people autonomy they're empowered to build cool things they feel the community appreciates them and they get to just like they get to be lovely they get to be seen as good as generous as smart as skillful they get to feel helpful so this intersection piece the the intersection of like intrinsic and extrinsic we need both right people need i i have people in our community who like i think are there full-time and they're some of them are working other jobs you know for one out of eight hours a day

and they're in our discord the other seven hours which is awesome um but like they need to they need to pay their bills right so it can't just be intrinsic but it can't only be extrinsic they want to be lovely i don't want to pay people to be nice i want to pay people because we're being successful and they're nice because they're nice this is another quote that i like a lot so the the inclination to take interest in novelty is a significant feature of human nature and i think that you know this starts out as kids but basically like you can sort of picture a dao community a little bit like a montessori school people just want to show up and play with things and contribute skills and

discover how they work so um the the kind of solution that we've used at uma and i'm going to talk a little bit about the um the particular mechanism here is that shared incentives can create the best of both worlds and so what that means is um giving a group of people an outcome that they're striving towards and that they all get equally if that outcome is achieved and what that does is it allows people to contribute to the progress of the community and you don't pay them individually you pay the entire group if the outcome is achieved and what that does is it lets them both like feel lovely and put food on the table and justify them

spending time in your community so the the product i'm talking about is kpi options what we can do at uma is basically tokenize an incentive and so uh for example the one that we're doing right now is on integrations and so there is a super room in in the out here right now called poopster who is raising his hand if poopster if poopster goes out into this crowd and gets another dow to integrate and use kpi options all of the kpi options held by other superhumans will increase in value at december 31st they mature and they can cash them out so like

this guy sitting right here can talk to one of you form an integration and bring back bring bring a win home for everyone and send a selfie and i just think that's pretty cool i think it's a i think it's a neat design and it does this cool job at straddling this intrinsic extrinsic uh problem so we've done this at uma internally in our doubt in our community um we have an extremely dedicated and distributed and unmanaged to think heavens uh sort of sas sales teams even though i you know sort of loathed to call out that a little bit um the part that i really love here is like the people like like each other and they take care of each other and concerned about mental health and spicy cheeto air drops and caring about the

upskilling so like what we see in our community a lot is people helping others make better content or make better products and i wanted to share this too i'm speaking at liz con can the super humans create my presentation well this presentation that you just saw was created by the superhumans using the kpi options i didn't i didn't offer anyone any additional pay we're just part of a community we want to build cool stuff together so this is my closing slide i'll leave it open for a couple questions rewards are neither good nor bad there's just good and bad uses of them

thank you we'll take just one question uh questions please there's a special prize for the first question asker price uh the teams that you are talking this is very mature team that can know like how to distribute the work between each other but did you deal with the teams when you have like five people that work really hard and one person who is lazy and in the end they like most of them like six people will get the rewards so how do you deal with that that is a very excellent question and it raises this topic where people care about fairness a lot so those other five people aren't only thinking oh i made a thousand bucks

they're pissed off that six person made a thousand bucks too and it's like it's it's kind of goes in the known issue category it's the free rider problem and so like the only way we've been able to deal with it is to basically like develop a way to measure the work that people are doing and then um each campaign that we run we give out a differing number of kpi options so those tokenized incentives like each token pays out based on the outcome but you can decide how many of those tokens to give to one individual and so we're moving towards like having tears depending on people's involvement but the free rider problem is a real one and that's a good question yeah thanks sure i'll run it back here

hey uh i'm alex uh thank you for the presentation i want to get back to the question of if you give people money to do stuff uh it means external extrinsic motivation right but if i i have a conversation with a guy yesterday about this topic but if if they if they don't know that they're going to be rewarded uh very few people are able to risk working on the task so there's no fairness in in this kind of uh scenario right now oh so you're right and that is something i've struggled with too which is where like

you're essentially expecting someone to take a risk or to work for free and hope to get paid and um like i think there's got to be a middle ground so like we're we're right now as a community um we're only kpi options but we're essentially starting to explore kind of a balance in between um but it's a real problem and like i think like there's ways to hack it like one could be that you um maybe offer people something like a salary in the beginning until they can justify until they're like confident or just do something of a mix but you're right i mean it's it's not that dissimilar to like a pure commission job right where you're taking on all the risk so um it's a balance i think it's got to be a balance um and it's something i'm struggling with

too both of both questions are things that i'm like still exploring they go in the known issues category yeah thanks thank you appreciate it man anyone else i know that we're overtime so okay last question keep it quick please yeah thank you so these sort of essentially kpis in general are great when we have a lot of certainty that the metric is good and the longer the timeline the less certainty we can have so for sales team seems like a no-brainer it's very simple sales could you talk a little bit more about maybe other use cases that you have thought about that diverge or can be you know more subjective perhaps sure no that's being able to define the kpi

is really important especially for uma so um like our oracle basically takes as an input a methodology document that you write up and uh and so the examples that i can think of are bankless dow created one on a legal document eragon created one on um motivating dows to to move from their to their new service um and so like there's just like a variety of options that you can use here it could be sales it could be a single outcome it could be the quality of a document but you have to like codify it properly