Extreme Ownership
Extreme ownership has led to AlphaGrowth’s success within its existing business units. We plan to roll out the same organizational principles as the Compound Growth Program expands into additional business units (SubDAOs) each with a specific expertise.
Extreme ownership manifests itself as having a single team lead for each business unit who is responsible for the successes and failures of their entire unit. The team lead will be responsible for:
- Negotiating with AlphaGrowth and the Compound DAO to set realistic 1-year KPIs that if achieved would ensure the continued funding of their SubDAO’s initiatives.
- Negotiating with other SubDAO leads to coordinate around shared resources such as marketing incentive spend
- Hiring and managing their supporting team members
- Ensuring their SubDAO has set ambitious and achievable timelines that ultimately achieve their SubDAO’s 1-year goals.
- Monitoring their teams progress to make sure they are on track
- Negotiating for funding on behalf of their SubDAO (after their initial funding)
The failure of a SubDAO will fall upon the shoulders of its lead, in which case the Growth Program Leadership or DAO at large may at any time move to replace the team lead or re-assign them within the team to a position of lesser authority in order to improve the team’s operations and chances of success.
SubDAO KPIs
Rough KPIs will be included in the articles describing each SubDAO business unit. Explicit KPIs will be solidified over the first 6 months of the 2025 growth program. They will be solidified alongside the teams that will be performing the work to ensure SubDAO teams are bought in to ambitious yet realistic goals that if achieved will justify the expense of their SubDAO’s budget.
Fears
The gantt chart at the bottom of this document shows that while SubDAOs are separate business units with specialities, campaigns like adding a blockchain are not 1-1 run by a single SubDAO. Many campaigns will require multiple subDAO’s to collaborate. Therefore a single subDAO will have a hard time taking credit for the addition of specific TVL to Compound. While the Incentives team may run the campaigns that actually draw TVL, they would not have incentives to distribute without the New Chains team negotiating with Chains to acquire them, nor would they have markets to run their campaigns on without the Markets & Assets team organizing with protocols to add their tokens as collaterals and match the marketing incentives Compound plans to distribute. Therefore, while TVL is an adequate overarching KPI to judge the effectiveness of the entire growth program, SubDAO’s will need more specific KPIs to judge the quality of their work and the level of impact their contribution has on the success of their collaborators. We don’t want a system where KPIs double count TVL and each team take credit for bringing it, at the same time they are all a part of the process. New Chains KPIs could be # of chains actually deployed, and $ collected from those chains as incentives to be distributed. This KPI of course would also need to mesh with the KPIs of the other teams to ensure the New Chains team is incentivized to take money from chains with DeFi ecosystems large enough to support the KPI metrics of the growth program as a whole.
SubDAO Compensation
Compensation packages for SubDAO members will initially be set by AlphaGrowth leadership, with the intention that after establishing suitable leads for each SubDAO, that the leads will set the compensation for their subordinates with oversight from AlphaGrowth leadership to ensure responsible use of funds.
Highly specialized operators who can effectively execute their goals are a rare and valuable commodity in the blockchain industry. We plan to offer performance based incentives structures that align the monetary incentives of our team members with the success of Compound Protocol. This form of structure will incentivize team members to go above and beyond rather than striving for the bare minimum. Organizations can get sucked into the paradigm of buying Microsoft and IBM because they are “known quantities” even if they’re not the best possible future. Our incentive structure will equally encourage and reward members who take chances on brand new initiatives in the pursuit of pushing forward the edge of DeFi. While Compound is boring and secure, we’ll strive to put Compound at the front of the next wave in business evolution on top of blockchain, as one of the core primitives that enable it.
Performance Based Initiatives
The Growth Program’s aggregate KPI is the TVL it brings to Compound Protocol through markets, collaterals, and structured product partnerships that would not have existed without the Growth Program’s initiative to create them. As such, the budget includes a $5M bonus per $1B of additional TVL the Growth Program brings to Compound starting on the day that the renewal is passed. This statement is not set in code and it will be upon the DAO to honor its commitment when the proposition is proposed to reconcile the bonus post the Growth Team Performing excellently. Here’s why the DAO would want to honor it’s commitment.
This bonus will be used as part of the compensation structure for every participant of the Compound Growth Program to ensure the retention of top talent in an investment bank style structure that provides members a variable bonus that is a significant proportion of their annual salary … paid out in chunks should the member stay for 3-6 months after their bonus is determined. This gives team members golden handcuffs where they’d walk away from significant compensation for leaving the team. They also have the potential to make themselves financially successful for excellent performance in which the DAO treasury is the ultimate winner because reserves earned off increased TVL will accrue at a faster rate than the funds invested in the bonuses retaining an excellent team.
Fears
Performance based bonus’s must be sustainable, they must be smaller than the amount of revenue generated back to the DAO, otherwise parties will argue that a growth team is draining the treasury, even if that growth team’s actions set up the treasury to make 2-3x more the following year. Speaking from experience, company boards can be short sighted with performance based incentives, they over value growth up front, and undervalue it after the fact.
Currently the Compound Reserves (which represent Compound’s profit) increase by about $5M each year per $1B of utilized TVL on Compound. If an investor drops another $1B onto Compound for the duration of 1 year, Compound’s revenue will increase by roughly another $5M per year.
By paying a growth team $5M per $1B of new TVL, the protocol essentially pays out the first year of revenue on that capital as a Finder’s Fee, and then the protocol keeps the revenue earned from that TVL for every future year without paying a fee.
In traditional software startups, as long as the cost of acquisition (CAC) is lower than the lifetime value (LTV … not to be confused with TVL) of a customer, the company continues to grow sustainably. In this case, as long as new funds stay on Compound for longer than 1 year the lifetime value of the deposits in terms of Revenue to the Compound Treasury will be greater than the CAC, making the growth strategy a sustainable virtuous cycle.
Relationships in Growth can break down when delegates set milestones they believe to be unachievable for which they are willing to pay top dollar … yet after they’re achieved, Delegates look at the same goal and believe the compensation is too large. Everything is impressive until it’s proved possible, like the 4 minute mile, and then it’s not valued. It’s okay to negotiate compensation for the next duration of time, but post negotiation on work already provided is bad faith and kills the moral of teams who are told their strategies were too simple to be valuable, when those teams have spent years failing and failing to perfect and simplifying the strategies they’ve employed on behalf of their client.
I don’t recommend a programatic way to pay out AlphaGrowth based on new TVL as it will be dangerous and complicated to program before the markets and integrations are built. But knowing this dynamic, I do strongly request the community to honor whatever commitment it makes in a re-election process, as we will honor our duty to improve Compound.
We will always strive to transparently share risks and concerns with the business structures we put forward. If you have an additional concern; in the immortal words of Eminem, “Here, tell these people something they don’t know about me.”
Growth Program Org Chart
Roles
Who needs to be hired
The growth program is lining up team members for the teams it will comprise upon expansion. All the roles in gray are currently in negotiation, if you’re in the community and would like to become involved with a specific team, please comment below and we’ll reach out.
Team Crossover & Support
The 8 SubDAO’s in the Org Chart above are collaborative business units designed to accomplish more together than the sum of their parts. Each has and will hone a specific expertise, the same external partner may interface with every Compound team at a different stage of their partnership with the Compound DAO. For example, here’s a gantt chart for how Linea may interact with Compound as we deploy Compound on Linea and integrate cTokens with the MetaMask-MasterCard debit card.
- Security is always present ensuring an incident free partnership
- The DeFi Deal Team understands How Linea’s treasury might use the Compound deployment to manage their assets
- In parallel the New Chain team negotiates Linea through the 65 steps of adding Compound
- A grant is given for the smart contract development
- While the TradFi team works with MasterCard on Debit Card partnerships
- And the DeFi Ops team understands how COMP token could play into the Debit Card
- Upon Linea launching on chain the Community team (which contains marketing) is engaged to shout from the rooftops and let the community know about the new opportunity
- New assets are added as collateral
- In exchange COMP and matching co-incentives are deployed on pools that use those collaterals to boost supply in a bull market where leveraged borrows are in high demand.
