Compensating loss incurred by App Miners due to error in BTC distribution
vishnuraghunathan opened this issue · 20 comments
What is the problem you are seeing? Please describe.
For the month of November 2019 the payouts for the BTC component have been given out based on 20% distribution curve instead of 5% distribution curve. According to App Mining Payout Tax Implications #160, it was decided that 5% distribution curve would be adopted for November App mining payouts for both STX and BTC. This was communicated officially through mail as well.
This error in distribution curve has adversely affected almost all apps in the app mining competition barring the top 9 apps. Most teams out of top ten list have incurred financial loss in the range of $500-$1650.
Refer to this sheet for exact loss incurred by top 200 teams.
How is this problem misaligned with goals of app mining?
The BTC component in the November 2019 app mining payouts were introduced to provide a cushion to app makers as if the entire amount was given out in STX, the tax implications would have been higher and the benefit to app makers would have gone down. The current payout also goes against the earlier decision taken regarding distribution curve to enhance the benefits of the app mining to a wider pool (Long tail: Ensuring that there is a min payout #25). The error in payouts has resulted in undue incentives to top 9 apps at the cost of 191 apps that have gotten less than what is due to them. As per my calculations, a total of $49,603 has been delivered to the wrong candidates.
What is the explicit recommendation you’re looking to propose?
Such an error had also taken place earlier in the app mining journey (Refer to this forum post). It was rectified by giving additional payouts to those apps that did not get their due. There are two possible solutions here,
- As mentioned above, all those apps that got less than their due should be compensated. Compensation in the Form of STX or BTC should be provided to those apps that got less than their due.
- In the December 2019 round of app mining, the difference amount from the apps that got an undue share of BTC in November should be adjusted and shared with those that deserve as per November 2019 App mining. This can be easily done and is only fair and just in the spirit of larger benefit of the ecosystem.
Describe your long term considerations in proposing this change.
App mining has been an innovative mechanism to encourage app makers to develop their apps and contribute to the development of Blockstack ecosystem. It is important that the procedures are followed in full spirit to enhance the credibility of the whole process. Any changes in the app mining process have always been decided either in the monthly call or on github. For ensuring the credibility of the process the decisions agreed by the community should be followed completely. If any error or issue takes place, it should be fixed rather than just brushing it aside ignoring its financial consequences to the app makers. Denial in accepting the mistake and not compensating the developers for their time, effort and money will have lasting repercussions in terms of trust for the system and processes.
App miners spend considerable effort (and opportunity cost) with the assumption that there is the potential of a certain gain. When they’re paid less than promised, that’s a loss, especially when the mistake results in the loss in the range of $500-$1650 per team(PC @njordhov from slack discussion). The decision arrived at github and calls should be implemented to the last word. As a growing ecosystem, we will be facing lots of issues and some mistakes may keep happening from time to time. How we choose to address them will reflect about the credibility of this cohort. These types of incidents are going to decide how we evolve as an ecosystem and whether we are worthy enough to preach for a ‘Can’t be evil’ ecosystem.
Additional context
Adding to the BTC loss incurred by app miners this month it is important to note that STX is trading at less than one-third ($0.09) of the price it is given to us ($0.3). Any app between rank#9-Rank#224 has effectively got one third of the prize amount. This itself is an extra burden which makes it all the more important to compensate the app makes for their loss because of this mistake.
Regarding the rectification method, the best would be in BTC since the affected area is BTC, which is 20% instead of 5%.
This is my comment on Slack channel. and some additional thought.
As @dant was saying, the payout was given for us as a reward for our effort in App Mining. Technically doesn't own anyone anything. We entered App Mining on our own will. I agree on that aspect.
But as the way Blockstack resolved this, it makes me question what guarantees that in the future when problems like this won’t happen again, when a promise was made, but was not done, then we get apologized and things get ignored and cannot be undone or made up I’m pretty sure this caused some developers to lose trust and motivation
I personally care more about the payout STX rate, because we all know that STX has dropped from
There are T&C (https://app.co/mining/terms) that say what it means to enter the App Mining program. It says that "The total prize amounts and allocation among Ranked Apps is subject to change." but it also says "...Blockstack reserves the right to substitution something of equal or greater value".
I would suggest the top apps return the BTC amount that was sent incorrectly. Then it is redistributed to the correct receivers.
I doubt the top app miner would return the BTC back. The only way this can be solved is to reimburse on later but deduct it from the top apps on the next month.
I see two options.
- We can ask the top apps to return the BTC which was greater and see how it works. Probably the risk is all the top apps have to agree.
- If the first option fails, we can deduct in December and the coming months. Here the challenge is for Rank 1, the payout in BTC was $20k, it would take many months to cover this up if we correlate with month on month ranking as the current payout stands at a max of $5 k BTC.
I strongly see it should be the first option, it will help us to see community members helping and standing for each other.
It's quite concerning to see lack of response and silence from the app mining team. $50000 has been wrongly distributed which isn't a small amount. It's almost a week this has happened and we haven't heard anything about how are they going to rectify this problem from the app mining team till now.
Hello, we've provided an update via email and slack about this. We hear the community feedback and have ensured that we’re going to enact the update for next month. This change occurred due to ongoing changes in our payout process. We hear your concern and take this seriously, but the funds were fully distributed and we’re unable to make a change at this time. Part of the adjustment to the STX payout distribution was to help offset potential tax burden, which should still be limited in this case. This is a novel system still in the pilot phase and we have updated our systems so that this does not happen again.
It is very hard to buy your justification regarding "ongoing changes in the payout process". A mail was sent on 16th October mentioning going ahead with proposal A and eventually it was reconfirmed via Github post on 29th October about this decision. The November payouts were sent on 5th December so the app mining team had at least 45 days to update their systems and communicate the changes to the concerned party.
Contrary to what app mining team is trying to make it i.e. "recent changes in the payout process" this is a clear case of negligence and carelessness from the app mining team. There have been number of times where it was iterated about the change. Consider if Blockstack PBC messes up salaries of the employees for a month, would the same justification be accepted? Mistakes are bound to happen but problem arises when you don't want to acknowledge what went wrong and casually brush aside and disregard its affect on the others, more so when it has financial implications. I'm really disappointed by app mining team's response and would like to know @muneeb-ali views on this. It would give a lot of clarity on lot of things to the community to know whether Muneeb endorses the way this entire issue has been handled.
I'm in touch with the team about this.
I'm in touch with the team about this.
Thank you @muneeb-ali. Waiting for your comments on this issue.
Thanks everyone for your continued input. As we all know, we at Blockstack are learning alongside the community, and we’re grateful for the community looking for improvements. After talking to our legal and finance teams, we’re going to request the misallocated funds back from the teams that were overpaid, and we’re going to correct the difference. The difference will be made on or after the December payout date, which is projected to be December 20th, 2019.
Even though I'm barely impacted, thank you @GinaAbrams @muneeb-ali and Blockstack.
Thank you @GinaAbrams , @muneeb-ali and Blockstack team
Well handled @GinaAbrams @muneeb-ali and thank you to @vishnuraghunathan and others for taking the time to argue the case. Glad we can leave this behind us.
Thanks @GinaAbrams and @muneeb-ali and all others who provided their inputs. As @njordhov mentioned, let us now leave this behind and get back to code. Special thanks to @wilsonbright who voluntarily took the initiative and offered to give back the extra payouts received when nobody asked him to. Examples like this are going to define us as a community as we move forward.
Now that we have an answer for this issue, @GinaAbrams, can we have a confirmation that all paid back and this issue is resolved? Or, if some did not, what is the correct response to whom that didn't do the right?
Thanks for checking in, Walterion. I was going to wait until the corrected payouts have been sent to close this out.
The difference will be made on or after the December payout date, which is projected to be December 20th, 2019.