MIP40c3-SPXX: Governance Alpha Core Unit MKR Budget - GOV-001

Preamble

MIP40c3-SP#: 
Author(s): @deim0x
Contributors:
Status: Request for Comments (RFC)
Date Applied: 2021-06-09
Date Ratified: <yyyy-mm-dd>

Sentence Summary

MIP40c3-SPXX adds the MKR Incentive Plan budget for Core Unit GOV-001: Governance Alpha.

Paragraph Summary

MIP40c3-SPXX adds the MKR Incentive Plan budget for Core Unit GOV-001: Governance Alpha. It contains:

  • Total MKR Expenditure Cap
  • Estimated MKR Expenditure (based on the current team)
  • Implementation

MKR incentives have been determined based on the SES MKR Compensation Program discussed here. This is a 3-year vesting plan with 1-year cliff vest.

Total MKR Expenditure Cap

The total MKR Expenditure will not exceed 1,045.54 MKR.

This covers the entire 3 years plan for 3.6 FTEs.

Estimated MKR Expenditure

The Estimated MKR Expenditure is the best guess of how much MKR will be used with the current team configuration.

Reasons why the Actual MKR Expenditure could rise closer to the MKR Expenditure Cap:

  • A raise for a member of the team
  • New hires
  • Repricing (and resetting) the program, in the case of bear market

Price floor: -30%. If any Contributor chose to reprice their program, they could do it at a maximum of -30% from the set MKR price.

MKR Forecast

For the permanent team, assuming the team configuration remains the same as today, this would result in the vesting schedule below.

Vesting Date MKR Amount
31 Oct 2021 0 MKR
30 Apr 2022 189.86 MKR
31 Oct 2022 94.93 MKR
30 Apr 2023 94.93 MKR
31 Oct 2023 94.93 MKR
30 Apr 2024 94.93 MKR
Total 569.57 MKR

This covers the total vesting schedule of 3 years for the current 3.6 FTEs.

On average, this yields 52.74 MKR per FTE per year.

Any changes to these amounts will have to be reported and reviewed.

Parameters

Property Value
MKR/USD lock-in Price (New) Trailing 6 month average
MKR/USD lock-in Price (OG) MKR = $689,15 (07/08/20 - 03/02/21)
MKR Price Floor -30% ($482)
Vesting Period 3 years
Cliff Vest 12 months
Vesting Schedule After cliff has expired, the Biannual MKR amount vests every 6 months
Manual Repricing yes
Auto-Renewal yes

Payment Implementation

This payment implementation makes no assumptions about the origin of the MKR. It can either be moved from the protocol’s treasury, newly minted, or obtained from another source.

Once DssVest or another payment flow has been adopted by the community, SES may propose to update its payment flow to comply with the standardized flow. That is assuming that the standardized flow is compatible with the vesting schedule, and that the risk is deemed acceptable by the team.

Reasons for this post

This is one of the most undervalued teams in the DAO. They give it all day in and day out and are not participating in the potential upside.

They might be too humble to ask for it themselves. Or too burnout.

Challenges (and considerations)

The information about the compensation has quite a big impact on the MKR requested. The idea behind this sub-proposal is to authorize for more than is going to be needed. The numbers will have to be reviewed with the assistance of Governance Alpha Team. This could be done before the approval or also before the transfer (and transfer only what is needed.) I made sure to left a big margin, so take that into consideration.

Credit where due

1 Like

It is really nice to get proposals on behalf of Core Units from the community, thank you for posting this @Deimos! This is the first time this has happened, where a non-team member submitted a budget modification on behalf of another core unit, so it has taken me some time to think about how to respond.

Speaking as a MIP Editor, the budget proposals for Core Units should ideally be submitted by the Core Unit facilitators or team members themselves since they might want to discuss the proposed changes and possibly add other modifications before deciding to formally submit a budget modification for their team. I recommend GovAlpha take your proposal as a signal from the community about the confidence-in and good wishes-towards their team and ultimately take over the proposal themselves.

If GovAlpha states otherwise, that they are comfortable letting you lead this proposal through a monthly cycle I will assign an SP#. In the meantime I will keep this proposal in the RFC section, encouraging discussion.

3 Likes

yeye tnx @davidutro

will be happy to let them take over if they want to

big fan of long and prose

1 Like

Umm. There has to be a mistake here. 1.681M MKR is worth almost 5B US at current 3500US/MKR. It is also more than total amount of MKR existing currently.

What should this number really be?

3 Likes

after serious consderation i decided to lower it :laughing:

and also tnx for spotting the error

it should be good now

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