Tutorial: How to Price Work on Gitcoin
Too low and put your scope at time/quality risk; Too high and you spend too much!
One of the major decisions involved in delegating work to the crowd is deciding how to price budget and price work.
We do all the hard work of sourcing developers for you, but there’s one hard thing we can’t do: Decide what to pay those developers!
This article aims to, in 6 minutes, help you decide how to do Gitcoin bounties on a budget.
Motivation #1: Save Money
It’s part of our roles as founders of our projects to do right by those who are financing us and make sure we’re paying market rates for development services.
It’s nice to save money.
Competing Motivation #2: Get Talent Flow
It’s part of our roles as community members of 21st century BUIDLers to pay a fair wage. Arguably for the following reasons:
- Moral reasons of doing unto others as you’d like to be treated, and
- Reputational reasons: Blockchain developers have enormous leverage in this market and they are unlikely to go places where they perceive reputation issues, especially that they will be underpaid.
Read below on how we’ve seen Gitcoin funders balance these motivations thus far (all data from Q1-Q2 2018).
Transparency Report: Trends on Gitcoin thus far
If you’re only interested in the mechanics of how to price an issue (not the theory) on Gitcoin, feel free to skip this section.
Here’s a graph that shows the hourly rate of Gitcoin issues (y axis) over time (x axis):
You’ll note that there are different colored nodes on this graph. That’s because we track this on a per project basis. This information is blurred for privacy reasons.
Here’s a Project Hourly Rate Leaderboard that shows different repos (which have been anonymized) and the median hourly rate of how much they pay:
We did a quick survey of each of the bounty funders on this list:
The ones that paid over 45 dollars an hour:
- Had ~1.6x more repeat bounty hunters.
- Had their issues turned around 55% more often.
- Took a median of ~32% less time to turn around.
- Had 24% less abandoned work.
So how do you want to price your issue? What rank do you want to be on this graph? Let’s take the data above, and infer some actionable insights.
- Don’t care about getting repeat bounty hunters (and aren’t recruiting)
- Don’t mind having a lower fill rate
- Are willing to be flexible about the turnaround time
- Don’t mind getting blown off once or twice
Feel free to price the task in the $10-$39 per hour worked range.
We have some preliminary data that suggests that hourly price affects these four metrics on a gradient. The further from $45 per hour you sway, the more pronounced these four metrics are swayed in either a positive direction (task completed on scope/time), or negative direction (task not completed on scope/time). This data will be the subject of an upcoming post.
Getting Decisive: What price is right?
So how do you want to price your issue? What rank do you want to be on the project hourly rate leaderboard?
To make the decision a little easier, Gitcoin provides a handy little hourly rate calculator on the bounty submission form:
We have created anchor points in the UI to help guide you at $40/hr, $80/hr, and $120 per hour. In general, we’ve found that:
- if you offer $120 per hour, you will have a 95% success rate.
- if you offer $80 per hour, you will have a 83% success rate.
- if you offer $40 per hour, you will have a 69% success rate.
- if you offer $20 per hour, you will have a 54% success rate.
Success Criteria: In a feedback email to funder, we asked if this task was “successful”.
In v2 of this post, I plan to splice this data by skill type (web dev vs protocol layer stuff vs functional programmer vs data science vs non-dev tasks), by programming language, and by geographic location. Got some data you’d like to see? Tweet me and let me know!
But what if I want to pay in ERC20 tokens?
Gitcoin supports bounties on any Ethereum-based token.
Our most popular token is Dai— the Stablecoin that’s worth exactly $1 per DAI token. For tokens with high liquidity and dependable conversion to USD (like DAI), please use the guide above.
Dai is a decentralized digital currency with stable value; the next step in the evolution of money.makerdao.com
For tokens that are lesser known, or have less (or no) liquidity, you’ll want to:
- Be sure they are not a security. Check with your local labour laws about legality of paying workers in these tokens.
- Figure out how much they are worth to according to your own Whitepaper and internal team’s economic thinking.
- If your project has momentum, take the amount from Step 2 and 3x it.
- If your project is at the seed stage, take the amount from Step 2 and 10x it.
- If your task is well scoped, your project is well documented, and, you have an active community, take the last amount you calculated it and cut the number by half.
Oh, and by the way Gitcoin’s New Bounty Form contains a task size estimator that works with tokens! If the token you are using is listed on Poloniex or EtherDelta, we have your data right in the UI.
Thanks for Reading
I hope you enjoyed our guide on how to price your tasks in Gitcoin’s double sided market. See you around teh internets!
1. Source Developers on Gitcoin: Post Your First Bounty Today!
Gitcoin is the easiest way to monetize or incentivize work in Open Source Software.gitcoin.co
2. Join The Community
To hang out and discuss, click below. We welcome you on our journey to grow open source and change the way we work.