MIP40c3-SP7: Modify Protocol Engineering Core Unit Budget

Thanks everyone, thoughts in response to the recent comments…

@iammeeoh running with your example for a moment, do you think it would instead make sense to remove the monthly/quarterly quality control, and replace it with a yearly review instead? I see this being a bureaucratically-governance-intensive task across the community when we should focus on getting things built. Hypothetically, this would give the team a 1 year bonus, reviewed every year based on the previous year’s performance. However! …

With that said, I would hesitate to see the longer term vesting model disappear because it provides a clear incentive to remain with the program at a point when one’s skills will be the most sort after - and naturally the incentive to stay is comparable. I can’t stress how much knowledge and system complexity is in the minds of employees who have been with us for longer periods of time.

It’s worth reiterating that if the team (or team facilitator) is underperforming they can be removed by Governance at any time.

It’s difficult to draw any significance from a historical point of view because the nature of demand for certain skills has changed so rapidly in recent years. Currently, it is the real-world competition and demand that has driven up the value of individuals which gets us to where we are now - competing protocols and top tier companies are our competitors. Levels.xyz , Glassdoor and competing forum blogs provide some insight into this.

I will say that this proposal has kick-started a number of discussions with senior engineers in the industry (external to Maker) who are expressing interest in what we are doing. I’m not going to jump the gun yet, but this is a promising sign to see us being able to get the attention of individuals to support future team growth.

@TheoRochaix and @Tosh9.0 thank you for your support. In similar threads calling out value propositions of different teams, namely from @Guy and @SebVentures , I agree that this proposal is different to other teams - I built it up to be independently competitive with market rates and competing industry offers for smart contract developers. I’m not opposed to a broader framework if it takes this proposal into account.

@iammeeoh thank you for sourcing the academic data and raising the notion of tenure as food for thought in the context of culture.

I think everyone realises the competitive market we are in and that the free market has shown that we will struggle to retain employees if the economic incentive is greater elsewhere. I do however think you raise a great point about culture and work hygiene. It’s a much much bigger topic than this thread can cover but in due course I would like to delve into this with the community - the attitudes, beliefs and behaviours that shape us as Maker are important and define why employees (not just engineers) want to work for Maker.

Thanks Nadia, indeed, we plan to illustrate clear OKRs, and if they change throughout the quarter, we need to communicate why. This is a challenge in crypto because things move so fast, however I’m certain that with our community and governance discussion channels we will be able to continue being transparent.

Yes! But there is a lot of work to safely get us there and beyond.

Regarding team growth. In the first year we have accounted for growing the team by 5 individuals. (currently we have a team of 9). It is expected that these new team members will receive the same MKR, vesting from their start date, as the rest of the existing team members.

This budget and growth within the first year is based on meeting current demand. For growth in following years we will submit a new proposal for Governance approval. My initial thoughts were that this would be less MKR due to lower risk but would be structured as the same 4 year vesting plan to incentivise long term commitment.

Just a note here on the 4 year vesting …I want to emphasise that It is very unlikely for people to stay in a role for 4 years in this industry. We want our team members to remain because their knowledge at years 2, 3, 4 is incredibly valuable - to know where the skeletons are in the closet and why certain technical approaches work or not saves weeks and weeks of work. I am trying to match the incentive with this skillset. Initially to attract, and then to retain.

^ this eternity in crypto is indeed a long time, which is why the MKR is unlikely to be paid out in full - but if it is, we really deserve those people. Also, during this time we remain accountable to Governance.

Alternatively, if we were pursue a 1 year timeframe we may get things out the door quicker to reach a goal but we lose the vested interest in making the protocol secure over the longer term.

Regarding MKR volatility - we proposed a % of supply, which I don’t see changing in the coming weeks regarding the existing surplus. If there is some dramatic change, I think it’s reasonable to raise it here for reevaluation.

@Aes, you raise good ideas in both your posts thank you. I am still giving thought to the performance based suggestions you had in your first post and will respond when I have a formulated my thoughts.

It’s challenging to convey emotion in forum posts, but I want everyone to know I am grateful for the effort and thought you have put in replying here. Much of this is still being considered and discussed with various stakeholders as we work towards the end of the RFC period.


Of course! I completely agree with 1 year being better than monthly/quartely.

I have to say I didn’t see this point. Thanks.
You are right that, under my proposed system, people are greatly incentivised when things go well, but not when things go bad.

Obviously the idea is that this incentivises people to “turn things towards well”, but it is true that it might be problematic to come out from a local-bottom if the incentives are low/null.

Good point!

Love this paragraph. Thanks. :clap:

I am sure things will work out in the best possible for for you, your Core Unit members (present and future) and MakerDAO as a whole.


Can we just ratify this and get to building? These numbers are pretty small in the grand scheme of things and the Smart Contract bottleneck is an existential threat to the continued success of the protocol. I think @Derek and the team are being pretty fair with their numbers given how important they are and we can continue the MKR vesting discussion as a larger philosophical discussion in another place. I’m really excited to get this moving so we can keep pumping out awesome new features.


After reviewing levels.fyi the top engineers at a few of the faangs are:

Facebook E8 - 302k base salary, 796k stock option 215k bonus

Google L8 - 326k base salary, 746k stock option 121k bonus.

It’s important to note these top paid software engineers typically are managing 100+ developers across multiple teams.

I think it is insane that each member of the SC team will be higher paid then the top engineers at Facebook and Google.

It feels like the SC team is trying to hold the project hostage with this ridiculous proposal.

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I think the SC people have competences that are currently very hard to find, and proven track of concrete results. They are in the right place at the right time. And it’s just natural that they want to maximise this good positioning.

I think this is a bit exaggerated.

But I agree with you that it is a failure of the Foundation to have left the community depending on a single group of devs.

It is my understanding though that both the community and the SC-team agree on the need (and perhaps even the urgency) to diversify over the course of the next few years.

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So true. Since every random problem in life, the universe, and everything can ultimately be traced back to the failings of the Foundation, clearly everyone will live in peace and life will be perfect once it is dissolved. I’m really looking forward to it. I for one do not expect anything less than paradise on the blockchain, and I will be utterly shocked should reality turn out to be just a bit more complicated than that.


lol, funny.
Sorry for a second I must have forgotten that “The Foundation” is perfect and has only done perfect things :slight_smile:

This dao’s operation costs will continue to increase as we add more core teams and I am concerned if the community accepts these high compensation proposals we will not have sufficient funds for the rest of the initiatives.

I also agree, I would much rather see the dao hire multiple SC teams of 6-7 devs in size that work independently of each other so we are not reliant on a single point of failure.

Can you please share the comparisons you found?

But would you expect other non-SC teams to earn significantly less?

Define significant? I agree smart contract developers must be highly compensated however their current proposal is far beyond any comparison I’ve found.

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If the budget proposal is too high doesn’t that give room for another team to propose a smaller budget to undercut the current team? Right now the SC team has a monopoly on negotiation as there is no alternative.

Then I think we would be doing the dao a disservice locking ourselves into this 4 year contract. Perhaps we bite the bullet for a year and use the time to launch a second SC team?
This would allow us to renegotiate next year from a better bartering position.

Couple of things here.

  1. The risk is much higher at MakerDAO than at facebook or google. MakerDAO is not a megacorp, it is far less likely to be around in a few years than facebook or google, and therefore there is a much higher chance that the stock options will be worth nothing.

  2. Lets avoid highly charged terms like ‘hostage’ and ‘ridiculous’. The Smart Contracts team have communicating their willingness to discuss the issue, and I have no reason to believe that they are acting in bad faith. Please try to engage in a positive manner.

This is an impressive feat of sarcasm, and I enjoyed it quite a lot. That said, lets maybe try to engage in a more straightforward manner. I don’t think anyone really believes that the Foundation has been net-negative for the development of MakerDAO, but it’s also not accurate to say that it has a perfect track record.

Please try to engage positively. Does this add anything to the discussion?


yes, true. I do apologise to @wouter for reacting so his sarcasm.

It’s just that it would be much better if we acted like we are in the same boat, because we are. Did I ever say that the Foundation was bad? For the record, I am grateful for the work it (and all the people who worked for it) has done. Do I think it is flawless? No.

Anyway, let’s move on :slight_smile:

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say “significant” = half.

Yes, as an example, experienced members of the SC should be paid more then twice as much as a member of the communications team.

However, there is a reason top companies standardize pay to a role and each employee is paid based on the role they are assigned.

Unless an individual is managing a large team of developers they are not worth a 2M+ package. Creating an environment where every SC developper we onboard gets 2M+ is not sustainable.

A few unanswered questions:
Is each member of the SC team equal?
What will be the starting pay for new SC members?
Should the team facilitator be paid equal to each team member?

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The purpose of a stock option is to align investor goals with employees. It is not designed to be guaranteed money. Maker will be more volatile over the next 4 years then facebook or Google stock however it also has the potential for much greater multiplicative returns.

I would also add the proposal is to mint new maker for the SC team at no cost. This is not the same as a stock option

A stock option would imply we instead give the smart contract team the right to buy maker at a set price and this option only has value if the price of maker goes up.


Hi all,

Three areas of comment as we put this MIP forward for Formal Submission:

  • Looking back over the previous month has seen a great deal of discussion on the pros & cons of this proposal. However, we have not landed on an agreement for the MKR reward, as a result the team has decided to put forward our original proposal for on-chain MKR voters to decide.

  • Due to ongoing discussion of the compensation framework, we reserve the right to switch from our MKR vesting plan to the MKR framework that the community has begun discussing, but has yet to agree on. We hope that a suitable overarching vesting framework will be chosen and backdated to the commencement date of the core unit(s). Therefore, we are submitting our proposal as it exists above, with the option, not the obligation, of switching to a community determined MKR compensation framework if/once it is agreed upon.

  • As per the update to MIP39c2-SP#7, specifically: “community discussion during the RFC process indicated that we should also give immediate attention to laying the groundwork to promote future protocol growth and innovation, in particular L2 development”. I have increased the number of team members by two, included in the budgeted costs.


Someone listen to this guy, he is the only person on this thread being reasonable…