MIP40c3-SP22: Modify Maker Portfolio Core Unit Budget

Preamble

MIP40c3-SP#: 22
Author(s): PaperImperium
Contributors: N/A
Status: RFC
Date Applied: 2021-06-28
Date Ratified: 

Sentence Summary

The Maker Portfolio Core Unit is requesting an annualized budget of 339,000 DAI, or 28,250 per month.

Paragraph Summary

The Maker Portfolio Core Unit (MPCU) will be tasked with creating and onboarding partnered legal entities that can provide the Maker Protocol with exposure to securities of its choice. The MPCU’s role is to find and implement legal, low-effort workarounds for Maker’s inability to join legal agreements or pass KYC requirements of counterparties. The MPCU’s priorities will be to safely scale upwards the supply of DAI, lock in long-term and predictable revenues for the protocol, and generate goodwill through a substantial charitable giving component as part of its tax mitigation strategy.

Specification

Core Unit Name

Maker Portfolio Core Unit

Motivation

This budget should be considered comprehensive of all costs incurred by this core unit. It will include – but not be limited to – research of financial opportunities, creation of legal entities to partner with, monitoring of those investments and entities, and regular reporting to the DAO.

Budget Considerations

This CU will run very lean, with most aspects outsourced to professionals who practice law, accounting, etc in a full-time capacity. It will also be run through the facilitator’s existing business to avoid incurring additional expenses related to healthcare, tax preparation, etc. Ongoing operating expenses related to the investments proposed by this CU will be born by the entities Maker partners with. This CU is intended to net add to the bottom line of Maker, and so expenses are not included unless necessary. As the activity level of this CU is increased or decreased, most expenses will grow or shrink linearly.

All applicable taxes will be paid by the facilitator from that salary. Any MKR vesting will be paid out of the total salary allocation of the facilitator and any future members, and will be sourced directly from the open market.

Budget

If at the end of each fiscal quarter (3 calendar months ending in March, June, September, or December), the CU wallet includes 200% of monthly budget in unspent funds, budget requests for the following quarter will be lowered by the amount of DAI present in the wallet.

Salary is commensurate with what other RWA-associated facilitators draw. Note that it also includes any allocation for MKR, so no vesting will be requested from the DAO. Also note that becoming a facilitator will remove me from the SourceCred rolls, which will result in an estimated 500 DAI/week for other DAO members to draw.

Trust Initiation Funding covers setup costs for a trust, a small seeding of cash to get the trust started, and drafting of trust documents. It is budgeted at a rate of one trust per month, and is the portion of the budget that will grow or shrink with Maker’s desired level of direct investment in fixed income.

Travel covers an estimated one to two domestic trips.

Research and Data mostly covers the cost of access to financial data services.

Miscellaneous Small Expenses is intended to cover office supplies and minor software expenses not already covered.

Annual Budget

Component Amount (in DAI)
Salary 180,000
Trust Initiation Funding 120,000
Travel 4,000
Research/Data/Information Sources 30,000
Miscellaneous Small Expenses 5,000
Total Annual Budget 339,000
Total Monthly Budget 28,250

Edited: Travel budget was reduced to estimated one to two domestic trips annually at the helpful suggestion by @Doo_Nam that the original amount was overkill.

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