MIP40c2-SP3: Core Unit Budget - GOV-001

MIP40c2-SP3: Core Unit Budget - GOV-001

Preamble

MIP40c2-SP#: 3
Author(s): @LongForWisdom
Contributors: N/A
Status: Formal Submission
Date Applied: 2021-02-03
Date Ratified: <yyyy-mm-dd>

Specification

Motivation

I am proposing this Core Unit Budget modification because GovAlpha needs a budget in order to be able to fulfill its mandate.

Core Unit Name

GovAlpha (GOV-001)

Quarterly Focus - April/May/June 2021

Expansion and Redundancy

A key focus for this quarter will be to expand the number of Facilitators of GovAlpha from one to three. Preliminary discussions have taken place with both @prose11 and @Elihu and both have expressed willingness to undertake the Core Unit Facilitator role. During this quarter I will help them onboard into this role. If all goes well, they will join me (@LongForWisdom) as equal facilitators in this Core Unit.

Improving SourceCred

While the SourceCred trial at Maker has been well received, development of the algorithm has continued over at SourceCred. We expect that the SourceCred team will continue to suggest improvements to SourceCred over the quarter which we should consider implementing.

Additionally, functionality has become available that will allow us to weight Cred generated by ‘likes’ in threads within a particular category or tag. With this functionality, we can be more targeted with SourceCred incentives, and more heavily reward users that participate in threads that are directly relevant to governance, such as commenting on MIPs and Signal Requests. The implementation of this functionality will require care but may lead to improved participation in those threads.

MIPs Portal

Up to this point, Governance has not been able to view, search or discover MIPs in an attractive and accessible way. This should change in the coming months. We are focusing heavily on launching a MIPs Portal which will fulfill this need. An initial version should be released in April at the latest, and additional functionality will be added once we have a minimum viable product that fulfills basic requirements.

Since their inception, MIPs have been opaque and difficult to engage with. I have high hopes that this portal will change that and improve buy-in and engagement with the MIPs process.

The Maker Protocol Operational Manual

Education of new or returning members of Maker Governance is a critical requirement of good governance that should not be ignored. The Maker Protocol is a complex system of smart contracts, and there are many aspects of functionality that are transmitted as institutional knowledge. Beyond that, the governance processes that MakerDAO has adopted are not trivial to understand.

The goal of this project is to create and maintain a set of documents that will allow MKR Holders to make informed choices when voting or signaling within the Maker Governance processes. These documents will be referenced in applicable signals, polls, and votes and will be maintained by GovAlpha. They will emphasize neutral, objective, and complete information about Protocol parameters and governance processes.

This manual may also be expanded to include a historical record of the key challenges and events that Maker Governance has dealt with since the launch of Multi-Collateral DAI.

Team Membership

The GovAlpha Team will consist of at least the following members in the April/May/June budget period.

@LongForWisdom - Partial Commitment - Governance Core Unit Facilitator
@prose11 - Full Time - Governance Core Unit Contributor
@Elihu - Full Time - Governance Core Unit Contributor
@charlesstlouis - Part Time - MIP Editor
@davidutro - Part Time - MIP Editor
@blimpa - Part Time - Governance Core Unit Contributor

Quarterly Budget - April/May/June 2021

Facilitator Remuneration

Remuneration for Facilitators of GovAlpha will be an annual salary paid monthly. The size of the annual salary will begin at a base rate that is equal for all facilitators and is then modified based on the level of the individual facilitator’s time commitment and experience.

The multiplier for partial commitment is higher than one might initially expect given the hours contributed compared to a full-time commitment. This is because facilitators with a partial commitment have the same requirements to be available in emergency situations and take an equal share of responsibility when fulfilling the GovAlpha mandate.

Base Pay 120,000 DAI
Multiplier Explanation
Commitment - Partial 0.80x Part Time commitment, 20 hours per week minimum.
Commitment - Full 1.00x Full Time commitment, 35 hours a week minimum.
Experience - Limited 0.65x New to the role, would not be able to fulfill responsibilities alone.
Experience - Moderate 1.00x Confident in the role, capable of fulfilling critical responsibilities alone.
Experience - Experienced 1.50x Experienced in the role, capable of fulfilling all responsibilities alone.
Partial Commitment Full Commitment
Experience - Limited 62,400 DAI 78,000 DAI
Experience - Moderate 96,000 DAI 120,000 DAI
Experience - Experienced 144,000 DAI 180,000 DAI

Breakdown

Item Amount
People
Core Unit Facilitators Salary (1) 36,000 DAI
MIP Editor (1) 6,000 DAI
Main Contributors (2) 39,000 DAI
Other Contributors (?) 5,000 DAI
Recurring Initiatives
SourceCred Payouts 66,000 DAI
SourceCred Support 15,000 DAI
One-off Projects
MIPs Portal 20,000 DAI
Other Costs
Gas 500 DAI
Contingency 52,500 DAI
Total 240,000 DAI

Remarks

The initial quarterly budget breakdown for GovAlpha can be found above. This is a quarterly budget that was created specifically for the months of April - June. It is heavily anticipated that this budget will increase in coming quarters as more Core Unit Facilitators are onboarded and additional projects are taken on.

For the initial quarter, the contingency item in this budget is quite high. The percentage of the budget made up of this contingency item is expected to decrease in future quarters, although the absolute amount may increase as the total budget request increases. This item has a higher share in the first quarter due to the uncertainty around which items need to be funded in the first quarter, and the Core Unit Facilitator’s inexperience with managing budgets.

Budget Implementation

This is a Manual Budget Implementation using the Interim DAO Multi-sig wallet that successfully passed through governance here.

The ethereum address of this multi-sig contract is: 0x73f09254a81e1F835Ee442d1b3262c1f1d7A13ff

And the keyholders are:
@LongForWisdom - 0x66f40F044E0e2F77bB746e3275E82e88dCBA2D69
@Primoz - 0x5d67d5B1fC7EF4bfF31967bE2D2d7b9323c1521c
@SebVentures - 0x0D61C8b6CA9669A36F351De3AE335e9689dd9C5b
@juan - 0xFCa6e196c2ad557E64D9397e283C2AFe57344b75
@hexonaut - 0x18CaE82909C31b60Fe0A9656D76406345C9cb9FB

The contract needs no authorization within the Maker Protocol, though it will require that one-third of the GovAlpha budget is sucked from the Maker Protocol at the start of each of the months: April, May, and June. This comes to 80,000 DAI per month.

This transfer will be included in the first executive vote of each month and will be included in each subsequent executive if the first executive does not pass. In the event of subsequent executive votes also failing to pass, the Governance Facilitator will make a decision on how to proceed.

The keyholders of the MakerDAO Interim Multisig have agreed to sign valid payouts for GovAlpha’s expenditures until a more robust solution can be constructed.

16 Likes

This might be a controversial comment, but I would encourage Governance to raise LFW’s “salary” to at least 150k/year. I would probably aim for something closer to 175k.

If I were to start a project, Long would be one of the first to call. If that said project were in DeFi, that statement would be even more true.

While I do appreciate his frugality, I don’t want any random project to snatch our top resources just because we’re saving a couple of hours of revenue.

11 Likes

I’m gonna second @juan here and add this tweet as reference:

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Feels like a weird convo to weigh in on as there are obvious personal benefits to me in terms of paying current and future Governance Facilitators more but with that disclosure I think it’s worth saying something.

I was surprised at how “low” of a salary @LongForWisdom is requesting as well. I think Long was more than fair with contributors, but maybe out a sense of fairness and not wanting to appear self motivated ended up underpaying himself. Idk what the “right” salary is, but certainly in terms of impact to the community and the legacy of MakerDAO, LFW deserves more.

Say what you will about bonuses, but I think it’s certainly worth noting here that as a facilitator things like SourceCred have to be turned off for Long. While other members of the community gain several thousand DAI for their forum contributions, Long is not compensated for them outside of his salary arrangement. Maybe setting certain performance related goals around the protocol governance to unlock bonus tranches is a worthwhile discussion. At the end of the day I just want to make sure the incentives are aligned to keep Long happy here. I feel my incentives are pretty clearly aligned and there’s a clear path for me laid out in this Budget and the GovAlpha Core Unit Proposal for me to earn more DAI and take on greater responsibilities, and I would love to see some “extra effort” incentive there for Long as well.

I currently have a feeling that Long does way more work than he “needs” to out of dedication and a sense of duty. But those things don’t pay the bills and it would be nice if there was a performance incentive we could utilize to pay him more and recognize him for all the spectacular work he achieves above the expected duties of the role.

2 Likes

It’s not even about the bills. It’s about the value he produces.

Heh. I wasn’t aware of this. @monet-supply knows. : )

I think there should be an alignment with the market. With those prices, I can barely hire someone senior in Berlin, let alone top talent. I’m not even talking about Silicon Valley.

I do believe that Maker has a couple of these “gems” (as Monet called them) that should be making more than us mortals. Messi probably earns 10x* the salary of Jordi Alba. And they play on the same team. Check the speeds for the fastest marathon in the world and the guy that’s #50. There’s much more difference there than between the latter and the runner #100*.

This is especially true in the world of Software Development. A developer that costs 120k is not equal to 2 developers at 60k. If we cannot understand this, we will have a hard time attracting talent.

Secondly, make it more discretionary. That will give you the flexibility to adapt to changing conditions (exampli gratia: you come across someone really good that you want to hire. It’s all good that you have internal guidelines to decide the brackets, but a budget (to me, at least) should look more like what @Primoz has done here:

I’m not googling the data to make my point. Distributions are rarely linear, but exponential.

1 Like

I agree very much with this. And that is not singling out any particular person, it goes for all. Paying less than market rate is not going to work in the long run and is additionally going to mess up our budgeting processes. Right now in the defi craze the ability to put Maker on the CV is probably worth a lot of DAI, but that is not going to last.

I think a Core Unit facilitator, if the Core Unit is seen as the workforce of Maker (by opposition to a service provider type of Core Unit which is fine as well), can’t easily pick a compensation. It should be decided by the community.

I think @LongForWisdom wants to charge a fair price, but it’s difficult to define what it is when it’s on you (at least I have this issue).

3 Likes

So I feel that we should try to narrow down on what the issue is here. There are three possibilities, each with their own solutions. It’s quite possible people think multiple of these are an issue.

Issues

  1. We aren’t valuing governance facilitators as much as we should be, so we may struggle to retain talent at all levels.
  2. We aren’t valuing experience as much as we should be, so we may struggle to retain experienced talent.
  3. We think that we aren’t valuing @LongForWisdom as much as we should be, and we might struggle to retain me specifically.

Solutions

  1. Increase the facilitator base pay for GovAlpha.
  2. Increase the multiplier for experienced facilitators.
  3. Governance implements some sort of facilitator incentive package outside of the Core Unit Budget.

Here’s an informal poll:

  • We should value all Governance Facilitators more highly.
  • We should value experienced Governance Facilitators more highly.
  • We should value @LongForWisdom more highly.
  • Current numbers are too high.
  • Current numbers are good.
  • Abstain

0 voters

EDIT: I forgot to add some options that should probably be there, so I reset the poll. if you’re one of the 3 people that voted, my apologies.

If you’re tempted to vote for me specifically, please try to consider that I’m hardly unique, and we should be putting systemic fixes in place, rather than patches for specific people.

I do think it’s important not to fall into the trap of having Governance negotiate Facilitator remuneration on an individual basis. It isn’t scalable.

2 Likes

you are unique (in a good way).

2 Likes

Bah, I made a poor choice of words. I’m hardly uniquely skilled or qualified for this role. I’m uniquely experienced only on the basis that I was the first to hold the role outside of the Foundation.

2 Likes

might as well add humble to the list also…

3 Likes

I love a good-ole’ fakey poll.

I have to call you out on this one, @LongForWisdom: when people think of a Governance Facilitator, they think of LongForWisdom, with all your skills. So of course they will vote for an “experienced Governance Facilitator”.

For those not aware, Long happens to be extremely good because of:

  • Technical Background
  • Protocol Understanding
  • Diplomacy
  • Logical and Rational
  • Caring and Committed

A Picasso painting is not unique. There are several of them. But they are quite rare. And highly appreciated too.

If you set the bar too low, the rest of the Facilitators and teams might have to follow suit. And that’s where the real problem starts.

3 Likes

Disclaimer, these are my views as an Operational Support Facilitator given as part of my mandate. It doesn’t represent any views or opinions of the Maker Foundation.

As discussed in the comments below, here are my thoughts on the facilitator salary (will publish a supporting post outlining the framework at a later time):

Let’s start by establishing that we are discussing the development of compensation guidelines for a role that has not existed previously (both in crypto and “real world”): a Governance Facilitator of a Protocol. From my research, I believe we are the only Protocol with a designated role. Other protocols with this function usually have a Founder or Community figurehead serve this purpose. It’s definitely a unique role, but one that I believe will stick around into the future.

Assuming:
Given the current income at ~3M a month with a globally distributed team (9 out of 11 mandated actors in different states & countries), I would say we want to be competitive with at least 75% percentile of market rate and staying global first.

Here is how I would unravel the components that go into the salary:

1. Role Benchmark:

  • Governance: a consistent and well-run governance process (MIPs, votes, etc) managed by elected facilitators in order to remain stable and secure as it grows.
  • Roles responsible for interpreting, enforcing, taking action on policies and law.

2. Level - Experience Needed

  • Facilitator
  • Outlined by this core unit as the multiplier: Facilitator is defined as Commitment + Experience (capability of fulfilling critical functions)
  • Outcome of the poll shows experience is valuable

Datasets (Role + Levels): This isn’t a deepdive into datasets, but outlined at high level. US Congressional Officers (avg of USD 172,500 a year), Court of Justice of the European Union (~256,000 EUR in 2016), Council of Europe (~107,000 - 159,000 EUR of Grade B and higher). More details on how EU Officials and EU agencies salaries are calculated. Usually these roles are separated into various responsibilities, but given right now the Facilitator is expected to do all, I think a higher grade as comparison is more appropriate.

3. Unique Expertise

A detail that’s missing is how difficult and how long it took for us to look for new Governance Facilitator candidates. We got really lucky with @prose11 and @Elihu just showing up. It’s incredibly hard to “recruit” for Governance Facilitators given the responsibilities & desire for neutrality, and perhaps what @longforwisdom is referring to him not being “unique” is that in the future it may be easier. Still, I don’t think we should undersell this variable, at least at the moment.

4. Optional: Logistics, Contract or Commitment Premium

This should be used when the DAO really wants someone. Outcome of the poll also shows LFW is valuable. In this case, the community wants to show LFW that he is desired/retained.

Maybe the DAO should consider a bonus based on length of term. A current assumption is that the longer Governance doesn’t vote/kick you out = your reputation grows / grows trust the community has in you. Under that assumption, maybe the DAO would give an annual bonus for Governance Facilitators for doing a good job under their term.

The Con to having a high rates for roles like these is that it may attract the wrong types of people. We should always maintain integrity in who we onboard.

All that being said,

This isn’t far off. Given the data shared, my personal suggestion would be a slightly higher multiplier for Moderate (~1.5x) and much higher multiplier for Experienced (~1.75x), knowing how critical the role of the Governance Facilitator is to help govern the system (imagine no voting going on).


Also, I (and perhaps other potential contributors) am curious to how Contributor pay is determined?


For Sourcecred payouts - there’s 13 weeks from (May - July because we pay a month ahead) x 5,000 (distributed weekly) + gas (they’re quite gas efficient but these days who knows). So it should be ~66,000. You may want to add a cushion for additional months if you intend to resubmit budget.


Will you be resubmitting a new budget for a full gov cycle? If so, then that would need to be submitted in May already…

4 Likes

I have updated the budget based on feedback. Here’s a summary of the changes:

Facilitator Remuneration

  • This is increased across all levels, skewing towards experience. The base rate rose to keep the ‘moderate-experience full-commitment’ equal to the base rate.
  • This puts my compensation at 144,000 DAI per year as I am in the ‘partial commitment, experienced’ category.

Other Budget Changes

  • Added gas expenses for submitting polls
  • Added a bit to SourceCred costs based on Amy’s feedback.
  • Increased the contingency to bring the monthly payout to a round number of 80,000, instead of 78,666 or something.

Total budget change for these 3 months is +15,000 DAI.

Budget Implementation
I added the budget implementation using the Interim DAO multi-sig.

Other Notes

  • GovAlpha is not funding @Davidutro as MIP Editor, he continues to be funded by the Foundation as part of his current role, which now includes MIP Editor responsibilities.
10 Likes

This subproposal has been moved to formal submission for the March governance cycle.

3 Likes