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MIP40c3-SP46: Adding Strategic Finance Core Unit Budget (SF-001)

Preamble

MIP40c3-SP#: 46
Author(s): @Aes 
Contributors: @SebVentures
Tags: core-unit, cu-sf-001, budget, dai-budget
Status: Formal Submission
Date Applied: 2021-12-01
Date Ratified: YYYY-MM-DD
Forum URL: https://forum.makerdao.com/t/mip40c3-sp46-adding-financial-strategy-core-unit-budget-fs-001/

Sentence Summary

MIP40c3-SP46 adds the DAI budget for Core Unit SF-001: Strategic Finance.

Paragraph Summary

MIP40c3-SP46 adds the budget for Core Unit SF-001: Strategic Finance. It contains:

  • Total Budget Cap: The hard limit voted on by Governance
  • First-month forecast: The actual first month estimated expenses
  • Breakdown of Permanent Team for the expected first payment (January)

Specification

Motivation

Based on the nature of the work done by the Strategic Finance Core Unit (SF-001), the budget reflects the needs of the team to ensure continuity of the work described in our MIP39c2-SP27. This is summarized in, but not limited to:

  • Maintaining Financial Statements, Reporting, and existing Dashboards
  • Driving alignment and facilitating discussion for Strategic Focus Areas & KPIs
  • Tracking, consolidating, and reporting Core Unit expenses to the DAO
  • Institutional vault analysis & deal negotiations
  • Oracle gas modeling and risk mitigation
  • Asset-Liability Management

Core Unit ID

SF-001

Budget Implementation

The SF-001 budget is designed with the following in mind:

  • Paying for the operational costs to run the core unit
  • Having a buffer for unexpected legal, technical, or financial problems

Therefore, a vote to ratify this MIP means MKR holders make a commitment to:

A continuous funding model similar to those proposed by RISK-001, SES-001, and DUX-001. If any modifications are needed, they would be done on a six-month basis through "Modify Core Unit Budget Subproposal Process" (MIP40c3 subproposals.) If modifications are not proposed, the monthly payment amount gets rolled over from the initial proposal, if our work meets community and MKR holders expectations and demands.

Smart Contract Implementations

  • This budget implementation uses the DssVest. This can be changed if needed to any method achieving similar objectives.
  • The first vesting budget will be in place from February 2022 to January 2023 included. It will be renewed each year.
  • Dai per month: 82,417
  • The destination wallet is: 0x387Cde8598E1CBb297FDc5bAEbA5E5c5c2735344 - SF Core Unit Multisig

Budget Breakdown

Dai Expenditure

We’re asking for a monthly budget of $82,417 DAI.

The budget cap differs from the actual expenses of the core unit. The cap refers to the maximum that the core unit can request for operating and it includes room for unforeseen circumstances.

Budget Breakdown

Summary Monthly Budget Annualized
Compensation $66,000 $792,000
Travel & Expense $1,500 $18,000
IT & Subscriptions $2,000 $24,000
Gas Costs $500 $6,000
Professional Services $500 $6,000
Hardware/Start-up $1,167 $14,004
Subtotal $71,667 $860,004
Contingency Buffer (15%) $10,750 $129,000
Grand Total $82,417 $989,004

Team Summary for 2022

The team for this budget cycle will be composed of 4 permanent members:

  • 1 Strategic Finance Facilitator - @Aes
  • 1 title TBD - @SebVentures
  • 1 Sr Finance Manager - TBD
  • 1 Sr Data Analyst - TBD

Longer Term we will expand to 7 FTEs including:

  • 1 Sr Financial Analyst
  • 1 Accounting Manager
  • 1 DAO Auditor

Budget Details

Providing additional detail with regards to the above line items:

Compensation: The initial team has two full-time senior positions, one Sr Financial Manager and one Sr Data Analyst. Funds from this budget item will also be used for part-time positions if needed.

The total compensation includes a competitive base salary and funds to cover health insurance, 401K matches, and other benefits offered in the marketplace.

Travel and Conferences: The team may travel to present at industry events, attend conferences or participate in a team offsite.

Hardware & Welcome Package: An allocation of $3,500 per new team member. (New members only, one-time cost).

IT & Subscriptions: We currently have subscriptions to Dune Analytics, Infura and Nansen and will test out various data providers to determine which product best suits our needs. We will also work with the Data Insights CU to see how our data needs can be served.

Gas Costs: Covers monthly payments to contributors

Professional Services: Coverage for legal, tax, and advisory services

Contingency Buffer: Approximately 15% of the total cap costs added in case of additional unforeseen expenses. Any Contingency Buffer funds used will be detailed in our financial reports for transparency.

The team will generate monthly financial reports with expense forecasts and return excess Dai at the end of the budget period.