The max funding any service provider can get in advance is three months so that caps our risk here.
KPI based payments is possible, though we are limited to tapping the DAO Multisig for funds once a quarter per service provider. Otherwise overhead for the multisig would be too great. Other problem with this is SP’s would be paid after the work is done or after a positive impact is observed - these SP’s have their own contributors which likely cannot work weeks/months without being paid with the chance they don’t reach their KPI targets and never get paid.
I would note this option was not discussed in the working group, but along the same lines we have requested “success metrics” that the community can use to judge the performance of an SP. The community would be updated on these on a monthly basis. As you say though Mike, we rely on the community to make a proposal to stop funding if the SP is not performing according to these metrics and that is not guaranteed to happen. Some members of the working group pushed for an “Accountability Committee” to be formed who would be empowered to oversee SP’s and could act without requiring a governance proposal. Ultimately this idea did not make it into the final proposal.