Incentive design
Future’s Edge operates on a unique task-based system where members access work opportunities matched to their skills, experience, goals, interests, and trust scores. Every task is structured as a smart contract that clearly defines submission requirements, proof standards, and associated rewards.
This document outlines our approach to determining the value of tasks to the organisation and designing incentive schemes that fairly reward members while maintaining economic sustainability.
Understanding this framework is essential for founding members who will help design, refine and govern these systems.
Rationale for this approach
Section titled “Rationale for this approach”Alignment with DAO principles
Section titled “Alignment with DAO principles”As a truly decentralized autonomous organization (DAO), Future’s Edge requires transparent, auditable systems for value creation and distribution. Smart contract-based task valuation ensures that:
- Every member can see how tasks are valued and why
- Incentive calculations follow consistent, publicly visible formulas
- Governance decisions about formula adjustments are data-informed
- The system remains fair as the organization scales globally
Human-centered design foundation
Section titled “Human-centered design foundation”Rather than arbitrary pricing or purely market-based approaches, our framework considers the full spectrum of value tasks create – financial, strategic, educational, social, and community-building. This ensures incentives align with our values of empowerment, learning, and impact while maintaining economic viability.
Preventing exploitation and gaming
Section titled “Preventing exploitation and gaming”By establishing clear formulas before launch, we:
- Minimize disputes about fair compensation
- Reduce opportunities for system manipulation
- Create predictable earning potential for members
- Balance organizational sustainability with member rewards
Enabling personalization
Section titled “Enabling personalization”The system allows different members to see different incentive offers based on their development goals, skill matches, and trust scores – creating pathways for both novices seeking learning and experienced members seeking income.
Task value determination
Section titled “Task value determination”Core principle
Section titled “Core principle”Before setting incentives for a task, we must first understand its value to the organization.
Task value represents the benefit Future’s Edge receives when the task is completed successfully – encompassing financial gains, strategic progress, risk mitigation, knowledge creation, and community strengthening.
Value evaluation factors
Section titled “Value evaluation factors”The following factors contribute to determining a task’s organizational value. Not all factors apply to every task, and weights may vary based on organizational priorities established through governance.
Financial impact factors
Section titled “Financial impact factors”| Factor | Description | Example application |
|---|---|---|
| Direct revenue generation | Income earned from client projects or services | A development task for a paying client generates invoice value |
| Cost avoidance or reduction | Preventing future expenses or improving efficiency | Automating a manual process reduces ongoing operational costs |
| Budget compliance | Completing work within allocated resources | Finishing ahead of schedule preserves budget for other initiatives |
Strategic alignment factors
Section titled “Strategic alignment factors”| Factor | Description | Example application |
|---|---|---|
| Mission and values alignment | Advancing core purpose of youth empowerment and digital skills | A workshop teaching blockchain basics to underserved youth |
| Strategic pillar contribution | Supporting key organizational priorities | Building partnerships with universities advances education pillar |
| Innovation potential | Creating reusable methodologies or approaches | Developing a new DAO governance framework others can adopt |
Time and dependency factors
Section titled “Time and dependency factors”| Factor | Description | Example application |
|---|---|---|
| Schedule criticality | Impact of delays on project or organizational timelines | Tasks on critical path toward client deliverable deadlines |
| Dependency multiplier | Number of other tasks or members blocked until completion | A design approval that unblocks five development tasks |
| Opportunity cost | Alternative value lost if task is delayed or incomplete | Missing a grant application deadline closes funding opportunity |
Quality and risk factors
Section titled “Quality and risk factors”| Factor | Description | Example application |
|---|---|---|
| Quality standards and complexity | Required expertise and precision level | Client-facing deliverables requiring professional polish |
| Risk mitigation | Reducing potential threats to the organization | Implementing security audit recommendations |
| Failure impact | Consequences of poor execution | Low-quality work damages client relationships and reputation |
Knowledge and capability factors
Section titled “Knowledge and capability factors”| Factor | Description | Example application |
|---|---|---|
| Knowledge asset creation | Producing reusable intellectual property | Creating tutorial content for the KnowledgeBank |
| Organizational learning | Building collective capabilities | First implementation of new technology creates learning for all |
| Proof-of-concept value | Validating approaches for future application | Testing a new governance mechanism in low-stakes context |
Community and network factors
Section titled “Community and network factors”| Factor | Description | Example application |
|---|---|---|
| Community growth | Attracting and retaining members | Creating compelling onboarding experiences |
| Network effects | Strengthening connections and collaboration | Organizing cross-field office collaboration sessions |
| Trust infrastructure | Enhancing governance and reputation systems | Improving the transparency of smart contract operations |
Impact and reputation factors
Section titled “Impact and reputation factors”| Factor | Description | Example application |
|---|---|---|
| Social impact value | Positive change created for target communities | Digital skills training for elders in underserved areas |
| Reputation enhancement | Elevating Future’s Edge visibility and credibility | Speaking at major conference or publishing research |
| Advocacy and awareness | Advancing causes aligned with organizational values | Creating content that promotes youth empowerment |
Governance and operational factors
Section titled “Governance and operational factors”| Factor | Description | Example application |
|---|---|---|
| Governance strengthening | Improving decision-making processes | Designing better proposal templates for member voting |
| Operational efficiency | Streamlining workflows and reducing friction | Building automation for routine administrative tasks |
| Scalability contribution | Creating templates and repeatable processes | Developing mission creation templates for field offices |
Value calculation approach
Section titled “Value calculation approach”While the final formula will be developed through founding member research and experimentation, a general approach includes:
- Identify applicable factors: Determine which value factors the task addresses
- Assign factor scores: Rate each applicable factor (e.g., 1-10 scale)
- Apply weights: Multiply factor scores by organizational priority weights
- Calculate base value: Sum weighted factor scores to produce task value score
- Validate intuitively: Check whether the value score feels right compared to similar tasks
Example simplified formula:
Task Value = (Financial Impact × 0.30) + (Strategic Alignment × 0.20) + (Knowledge Creation × 0.15) + (Community Building × 0.15) + (Time Criticality × 0.10) + (Risk Mitigation × 0.10)
Task type considerations
Section titled “Task type considerations”Different task categories emphasize different value factors:
- Client project work: Higher weight on financial impact, schedule criticality, quality standards
- Governance activities: Higher weight on trust infrastructure, governance strengthening, community participation
- Self-development: Higher weight on knowledge creation, organizational learning, member portfolio building
- Impact missions: Higher weight on social value, advocacy, alignment with values, community benefit
Incentive scheme determination
Section titled “Incentive scheme determination”Core principle
Section titled “Core principle”Once task value is established, we determine appropriate incentives to motivate completion while maintaining organizational sustainability.
Incentives should attract qualified members, encourage quality work, and reward contributions fairly across the organization’s multiple reward currencies.
Incentive design factors
Section titled “Incentive design factors”Supply and demand dynamics
Section titled “Supply and demand dynamics”| Factor | Description | Impact on incentives |
|---|---|---|
| Task availability vs. member capacity | Ratio of open tasks to available qualified members | When many tasks compete for few members, incentives increase |
| Scarcity of required skills | Rarity of expertise within the organization | Specialized skills command premium incentives |
| Competition for attention | Other attractive opportunities available to members | Peak activity periods may require higher incentives |
| Unpopular but necessary work | Tasks members consistently avoid | Escalating incentives until claimed |
Temporal urgency factors
Section titled “Temporal urgency factors”| Factor | Description | Impact on incentives |
|---|---|---|
| Deadline proximity | Time remaining until due date | Surge pricing as deadlines approach |
| Time decay on value | Value reduction over time | Front-loaded incentives for time-sensitive tasks |
| Optimal timing windows | Ideal completion periods | Peak incentives during optimal windows |
| Opportunity cost of delay | Cascading impact on dependent tasks | Higher incentives to prevent bottlenecks |
Member-specific personalization
Section titled “Member-specific personalization”| Factor | Description | Impact on incentives |
|---|---|---|
| Skill match and development goals | Alignment with member’s learning pathway | Lower cash, higher skill badges for developmental tasks |
| Trust score and rank thresholds | Member’s standing in the organization | Different reward currencies at different levels |
| Individual performance patterns | When members are most productive | AI-driven timing optimization for task offers |
| Historical preferences | Patterns in past task selections | Adjusted incentives to encourage portfolio diversity |
Immediate vs. delayed reward structures
Section titled “Immediate vs. delayed reward structures”| Factor | Description | Impact on incentives |
|---|---|---|
| Instant feedback mechanisms | Real-time micro-rewards for milestones | Stronger behavioral reinforcement |
| Variable ratio reinforcement | Unpredictable bonus rewards | Higher sustained engagement |
| Progress visibility | Real-time accumulation displays | Psychological momentum through goal gradient effect |
| Vesting schedules | Partial immediate, remainder upon quality review | Balancing motivation with quality assurance |
Collaborative vs. solo task considerations
Section titled “Collaborative vs. solo task considerations”| Factor | Description | Impact on incentives |
|---|---|---|
| Team formation dynamics | Collaboration requirements | Bonuses for assembling high-performing diverse teams |
| Peer evaluation components | Team-distributed incentive pools | Encouraging genuine collaboration over free-riding |
| Network effects multipliers | Collective benefits from collaboration | Shared bonuses for strengthening field office cohesion |
| Mentorship incentives | Pairing experienced and novice members | Rewards for both learning outcomes and knowledge transfer |
Risk and complexity adjustments
Section titled “Risk and complexity adjustments”| Factor | Description | Impact on incentives |
|---|---|---|
| Experimentation premium | Uncertain outcomes for R&D tasks | Higher incentives compensate for failure risk |
| Complexity multipliers | Integration of multiple skills or technologies | Compounding incentives for sophisticated work |
| Reversibility costs | Expense of correcting errors | Lower upfront, significant quality bonuses |
| Learning curve compensation | First-time task types | Learning subsidies that decrease with organizational experience |
Strategic organizational priorities
Section titled “Strategic organizational priorities”| Factor | Description | Impact on incentives |
|---|---|---|
| Strategic alignment bonuses | Advancing current strategic pillars | Premium incentives adjusted quarterly |
| Capacity building investments | Creating reusable assets | Long-tail incentives as others use the work |
| Underserved division support | Addressing resource imbalances | Temporary boosts to priority areas |
| Governance participation floors | Ensuring continuous organizational functioning | Minimum incentives for essential governance tasks |
Multi-dimensional reward types
Section titled “Multi-dimensional reward types”| Factor | Description | Impact on incentives |
|---|---|---|
| Trust score vs. tokens vs. badges | Different reward currencies | Governance tasks earn trust, creative tasks earn impact NFTs |
| Reputation decay counters | Maintaining scores during inactivity | Strategic value beyond immediate rewards |
| Access and privilege unlocks | Exclusive opportunities | Non-fungible rewards like advanced missions or mentorship |
| External credential value | Portable blockchain-verified credentials | Lower internal incentives acceptable for career-valuable work |
Dynamic incentive mechanisms
Section titled “Dynamic incentive mechanisms”Unlike static pricing, many task incentives will adjust automatically based on real-world conditions:
Time-based escalation
Section titled “Time-based escalation”Incentives increase as deadlines approach or tasks remain unclaimed:
Current Incentive = Base Incentive × (1 + Urgency Factor)
Where Urgency Factor = (Time Elapsed / Total Time Available) × Escalation Rate
Demand-responsive pricing
Section titled “Demand-responsive pricing”Similar to surge pricing in gig economy platforms, incentives respond to supply-demand imbalances:
Current Incentive = Base Incentive × (Open Tasks / Available Qualified Members)
Personalized offers
Section titled “Personalized offers”Different members see customized incentives based on their profiles:
Member Incentive = Base Incentive × Skill Match Factor × Development Goal Alignment × Trust Tier Multiplier
Incentive calculation approach
Section titled “Incentive calculation approach”A general framework for determining task incentives includes:
- Start with task value: Use the organizational value score as baseline
- Apply sustainability factor: Multiply by affordability ratio (available treasury / projected needs)
- Add dynamic adjustments: Incorporate temporal urgency, supply-demand, personalization factors
- Select reward currencies: Determine mix of cash, trust score, badges, reputation based on task type
- Set circuit breakers: Establish maximum limits to prevent unsustainable escalation
- Preview and validate: Check whether incentive package feels motivating and fair
Example simplified formula:
Base Incentive = Task Value × Treasury Sustainability Factor
Dynamic Incentive = Base Incentive × (1 + Urgency Factor) × Supply-Demand Factor × Member Personalization
Final Incentive Package = { Cash: Dynamic Incentive × 0.60, Trust Score: Dynamic Incentive × 0.25, Skill Badges: Dynamic Incentive × 0.15 }
Behavioral economics considerations
Section titled “Behavioral economics considerations”Drawing on research about human motivation and decision-making:
- Loss aversion framing: Some incentives structured as potential losses (deadline penalties) rather than pure gains
- Social comparison effects: Anonymous leaderboards leverage competitive motivation without toxicity
- Endowment effects: Allowing members to “claim” tasks with provisional rewards creates psychological ownership
- Milestone chunking: Breaking large tasks into smaller milestones with intermediate rewards maintains motivation
Potential challenges
Section titled “Potential challenges”Understanding potential problems helps us design more resilient systems and respond effectively when issues emerge.
Economic sustainability challenges
Section titled “Economic sustainability challenges”Incentive inflation spirals: Dynamic pricing that escalates too aggressively could drain organizational treasury faster than revenue generation.
Mitigation: Circuit breaker maximum limits, treasury monitoring dashboards, governance alerts when escalation exceeds thresholds.
Revenue-cost mismatch: Client projects might not generate sufficient surplus to fund community development and governance tasks at sustainable levels.
Mitigation: Cross-subsidization models where higher-margin work funds lower-margin but strategically important work, transparent treasury reporting.
Market volatility: Cryptocurrency-based rewards create wildly inconsistent real-world value for members.
Mitigation: Hybrid reward structures with stable fiat options, geographic purchasing power adjustments, member choice in reward currencies.
Fairness and equity challenges
Section titled “Fairness and equity challenges”Geographic inequality: Members in lower-cost-of-living regions might systematically undercut others, or purchasing power adjustments might feel unfair.
Mitigation: Transparent methodology for geographic adjustments, community governance of adjustment factors, baseline quality standards.
Skill-based stratification: Advanced members might monopolize high-value tasks while novices struggle to access opportunities.
Mitigation: Reserved task pools for lower trust scores, mentorship requirements for advanced members, progressive skill-building pathways.
Time zone disadvantages: Members in certain time zones might face systematic disadvantages if urgent tasks emerge during their sleep hours.
Mitigation: Time zone diversity requirements for critical tasks, asynchronous work options, follow-the-sun task distribution.
Accessibility gaps: Members with disabilities, intermittent internet, or competing responsibilities might be structurally disadvantaged.
Mitigation: Alternative task formats, extended timeframes without penalty, accessibility accommodations, diverse task types.
Behavioral and psychological challenges
Section titled “Behavioral and psychological challenges”Intrinsic motivation crowding: Over-reliance on extrinsic rewards might undermine members’ genuine passion for learning and impact.
Mitigation: Balance of reward types, celebration of intrinsic value, non-monetary recognition, purpose-driven framing.
Status anxiety and comparison: Visible leaderboards and incentive rankings could foster toxic competitiveness or imposter syndrome.
Mitigation: Anonymous aggregate displays, emphasis on personal growth trajectories, collaborative achievements celebrated equally.
Addiction dynamics: Variable ratio reward schedules that maximize engagement could create unhealthy patterns, especially for vulnerable youth.
Mitigation: Time investment limits, well-being check-ins, emphasis on sustainable participation, mental health resources.
Fairness perceptions: Even economically rational incentive adjustments might feel unfair to members, eroding system trust.
Mitigation: Transparent formula communication, opportunity for appeals, regular community feedback, governance involvement.
Technical and smart contract challenges
Section titled “Technical and smart contract challenges”Smart contract vulnerabilities: Bugs in incentive calculation logic could be exploited for financial gain or cause unintended distributions.
Mitigation: Rigorous security audits, bug bounty programs, phased rollouts, emergency pause mechanisms, insurance reserves.
Formula complexity: Multi-factor dynamic pricing algorithms might produce unexpected edge-case behaviors or become computationally expensive.
Mitigation: Extensive simulation testing, simple formulas first with gradual sophistication, monitoring for anomalies.
Upgrade difficulties: Modifying smart contract logic after deployment requires complete system migrations.
Mitigation: Modular contract architecture, proxy patterns for upgradeability, governance-controlled parameters.
Social and community challenges
Section titled “Social and community challenges”Trust erosion: Poorly functioning incentive systems could undermine belief in Future’s Edge’s mission, causing high-value members to leave.
Mitigation: Rapid response to problems, transparent communication about challenges, member involvement in solutions.
Communication barriers: Explaining complex incentive adjustments across languages and cultures could lead to misunderstandings.
Mitigation: Plain language documentation, visual explanations, multilingual support, cultural context consideration.
Resistance to change: Members who benefited from initial structures might oppose governance proposals to rebalance the system.
Mitigation: Clear rationale for changes, gradual transitions, grandfathering provisions, democratic decision-making.
Clarifications on risk mitigation
Section titled “Clarifications on risk mitigation”Based on Future’s Edge structure, several commonly cited DAO challenges are already addressed:
- No whale dominance: Each member has an equal vote regardless of trust score or token holdings
- Sybil attack protection: Trust score threshold requirements for governance participation make operating multiple accounts prohibitively expensive in time and effort
- Payment after proof: Members only receive rewards after verified completion and acceptance through appropriate review mechanisms
Methods to approach the design of these schemes
Section titled “Methods to approach the design of these schemes”The founding team should employ a human-centered, iterative approach to developing these critical systems.
Research phase
Section titled “Research phase”User-centered discovery
Section titled “User-centered discovery”- Member journey mapping: Interview potential members about what motivates them, what they find valuable, and what feels fair in reward systems
- DAO case studies: Analyze existing platforms (Gitcoin, Coordinape, Dework) to understand what works and fails in practice
- Empathy mapping: Create empathy maps for different member personas – novices seeking learning, experienced members seeking income, governance enthusiasts, impact-focused contributors
- Behavioral economics research: Study literature on intrinsic vs. extrinsic motivation, fairness perception, and incentive design
Parallel experimentation approach
Section titled “Parallel experimentation approach”- Run small safe-to-fail experiments: Create 3-5 different valuation approaches and test them with small pilot groups
- A/B testing framework: Design controlled experiments where different member cohorts experience different incentive structures, then measure engagement, quality, and satisfaction
- Simulation modeling: Use agent-based modeling to simulate how different formulas might create emergent behaviors before deploying live
Discussion and co-creation phase
Section titled “Discussion and co-creation phase”Founding team workshops
Section titled “Founding team workshops”- Design thinking sprints: Run structured workshops using the double diamond approach – diverge to generate many possible valuation factors, then converge on the most critical ones
- Strength-based team formation: Leverage each founding member’s unique strengths to assign roles in formula development
- Values alignment sessions: Regularly check that proposed formulas align with Future’s Edge core values – ensuring formulas don’t accidentally incentivize behavior contrary to trust, openness, or collaboration
Diverse perspective integration
Section titled “Diverse perspective integration”- Cross-disciplinary collaboration: Intentionally bring together founding members from different backgrounds – economics, education, technology, social work – to spot blind spots
- Youth-led validation: Present draft formulas to youth advisors (under 25) to get feedback on whether the system feels fair and motivating
- Veil of ignorance approach: Ask founding members to design formulas as if they don’t know what role they’ll play – novice or expert, client-facing or governance-focused
Formulation and iteration phase
Section titled “Formulation and iteration phase”Transparent documentation process
Section titled “Transparent documentation process”- Living documentation: Create formula documentation in the public KnowledgeBank from day one, allowing community feedback during development
- Decision journal: Document not just what formulas you choose, but why – the assumptions, trade-offs, and concerns
- Version control: Treat formulas like open-source code – track changes, explain updates, allow community to see evolution
Technical prototyping
Section titled “Technical prototyping”- Spreadsheet modeling first: Build Excel/Google Sheets models that can be easily tweaked based on feedback before coding smart contracts
- Smart contract sandbox: Deploy test versions on blockchain testnets where founding members can interact without real financial stakes
- Quality metrics dashboard: Create real-time dashboards showing how formulas perform against key success criteria
Validation and refinement phase
Section titled “Validation and refinement phase”Pilot programs
Section titled “Pilot programs”- Founding cohort as guinea pigs: Have the founding team use the system first, experiencing it as both task creators and completers to identify pain points
- Small-scale launch: Roll out to 30-50 early adopters before full launch, with explicit framing that this is experimental and will evolve
- Structured feedback loops: Schedule weekly retrospectives during pilots where members share what felt fair, unfair, motivating, or frustrating
Iterative refinement cycles
Section titled “Iterative refinement cycles”- Two-week sprints: Adopt agile methodology where formulas can be adjusted every two weeks based on data and feedback
- Metrics-driven adjustment: Define clear success metrics and adjust formulas when metrics indicate problems
- Community governance from start: Even in early stages, allow members to vote on proposed formula adjustments
Ongoing learning infrastructure
Section titled “Ongoing learning infrastructure”Establish feedback mechanisms
Section titled “Establish feedback mechanisms”- Post-task surveys: Brief 2-3 question surveys after every completion asking about fairness and suggested improvements
- Monthly town halls: Regular community gatherings where members can raise concerns and propose improvements
- Anomaly detection: Monitor for statistical outliers – tasks that surge abnormally, members gaming the system, formulas producing unexpected distributions
Create adaptation protocols
Section titled “Create adaptation protocols”- Emergency override process: Define who can make urgent formula adjustments if serious problems emerge, with transparency requirements
- Constitutional amendment process: Establish how major formula changes get proposed, debated, and voted on by the full DAO
- Academic partnerships: Consider collaborating with university researchers to study the incentive system for external validation and insights
Summary and key takeaways
Section titled “Summary and key takeaways”Core principles
Section titled “Core principles”- Value before incentives: Always determine organizational value first, then design appropriate incentives – not the reverse
- Transparency builds trust: All formulas, weights, and adjustment mechanisms should be publicly visible and auditable
- Human-centered design: Systems should feel intuitive and fair to members, not just be mathematically optimal
- Iterate, don’t perfect: Launch with good formulas and improve continuously rather than delay seeking perfection
- Distributed sense-making: Empower members to interpret performance data themselves, not rely solely on founding team analysis
Essential components
Section titled “Essential components”Task value determination combines:
- Financial impact (revenue, costs, budget)
- Strategic alignment (mission, innovation, pillars)
- Time factors (urgency, dependencies, opportunity cost)
- Quality and risk considerations
- Knowledge and capability building
- Community and network effects
- Impact and reputation
- Governance and operations
Incentive scheme design incorporates:
- Supply and demand dynamics
- Temporal urgency and deadlines
- Member-specific personalization
- Reward structure timing
- Collaboration vs. solo considerations
- Risk and complexity adjustments
- Strategic organizational priorities
- Multiple reward currencies
Success factors
Section titled “Success factors”For founding members:
- Commit to human-centered research and member involvement
- Embrace experimentation and learning over perfection
- Stay grounded in organizational values during technical design
- Maintain transparency even when formulas are imperfect
- Listen deeply to member experiences of fairness and motivation
For the system:
- Balance economic sustainability with fair member compensation
- Prevent gaming and exploitation through thoughtful design
- Address equity concerns proactively (geographic, skill-based, accessibility)
- Monitor behavioral and psychological impacts
- Build in mechanisms for continuous improvement
For the organization:
- Use formula development as community-building opportunity
- Create trust through transparent, consistent processes
- Align incentives with mission rather than just market rates
- Celebrate both extrinsic and intrinsic motivation
- Evolve systems through democratic governance
The path forward
Section titled “The path forward”Task valuation and incentive design will evolve continuously as Future’s Edge grows. What remains constant is our commitment to:
- Fairness: Every member deserves transparent, equitable treatment
- Sustainability: Systems must support long-term organizational health
- Empowerment: Incentives should enable member growth and impact
- Learning: We approach this as an ongoing experiment, not a finished solution
- Community: Members collectively govern and refine these systems
By understanding these frameworks, founding members can contribute meaningfully to designing systems that honor our values while enabling Future’s Edge to thrive as a pioneering DAO that genuinely empowers youth to shape their futures.