# MIP40c3-SP68: Modify Protocol Engineering Core Unit Budget - (PE-001) ## Preamble ``` MIP40c3-SP#: 68 Author(s): Derek Flossman Contributors: Protocol Engineering Core Unit Tags: core-unit, cu-pe-001, budget, dai-budget, active Status: Accepted Date Proposed: 2022-03-09 Date Ratified: 2022-04-25 Forum URL: https://forum.makerdao.com/t/mip40c3-sp68-modify-protocol-engineering-core-unit-budget-pe-001/13797 Ratification Poll URL: https://vote.makerdao.com/polling/QmWphKJY ``` ## Sentence Summary This subproposal is requesting a 12 month Budget of 7,590,000 DAI for the Protocol Engineering Core Unit starting from May 2022. This will be implemented via a 632,500 DAI per month stream using DssVest. ## Paragraph Summary TBD ## Specification ### Motivation Protocol Engineering would like to secure an operating budget for it to deliver its mandate over the next 12 months. The [prior year's budget in review](https://forum.makerdao.com/t/pecu-2021-2022-financial-year-in-review/13793) gave a good illustration as to where Protocol Engineering under- or over- budgeted for the work we sought to accomplish, which has subsequently helped inform this document. The following proposal is also in support of the forum post: [Protocol Engineering Core Unit Workstreams](https://forum.makerdao.com/t/protocol-engineering-core-unit-workstreams/13795). Our team stands behind this proposal as an optimal solution for scaling the Core Unit in a dynamic environment. We encourage readers to review that post in conjunction with the below budget request. ### Core Unit ID - PE-001 (Protocol Engineering) ### List of Budget Implementations * Using DssVest, the budget will be distributed monthly to the Protocol Engineering Core Unit Multisig: 0xe2c16c308b843eD02B09156388Cb240cEd58C01c * The first month's payment will include the core unit cost for May (632,500 DAI) plus the Emergency Fund amount (800,000 DAI) for a total of 1,423,500 DAI. * Multisig Ownership: This multisig is anonymous individuals selected by the Protocol Engineering Team. For reference, the Protocol Engineering Emergency Multisig remains in operation: 0x83e36aAA1c7b99E2D3d07789F7b70FCe46f0d45E, with the following 3-of-6 signatures: * Derek (Protocol Engineering): 0xe3a76328edE8Fd61d5fA7840b878Dd69cdfD67d8 * Nadia (Growth CU): 0xc8E6c287F6c127AFE5e4CB30bC440607b44c35f8 * LongForWisdom (GovAlpha) : 0x66f40F044E0e2F77bB746e3275E82e88dCBA2D69 * Primoz (Risk CU): 0x5d67d5B1fC7EF4bfF31967bE2D2d7b9323c1521c * Cmooney (Protocol Engineering): 0xEeF3026eF864C9398c008195E65d16D9cb42a512 * Nik (Oracles CU): 0xB4CFf22c0d5a015460Fd503a9328Bf00a24f686c ### List of Budget Breakdowns The following table illustrates the proposed budget for 2022-2023: ![](https://github.com/makerdao/mips/blob/master/MIP40/MIP40c3-Subproposals/supporting_materials/MIP40c3-SP68/breakdown.png) #### Budget Details The following items provide further detail into the above data points. ##### Salaries & Healthcare * The team has decided to remain on the same salaries as the previous year. * The biggest cost driver is due to the team choosing to increase headcount by 3, from 14 to 17. Further detail about this decision and the roles being sought can be found in the Protocol Engineering Team Core Unit Workstreams [Forum Post](https://forum.makerdao.com/t/protocol-engineering-core-unit-workstreams/13795). * Healthcare as a line item has been removed, standardized across team members and rolled into the salary line item (previously we had a two-tier model: US and non-US), this means some team members are seeing up to a 2% increase in pay as a result. * New monthly reporting will indicate how many resources each workstream is using (Core Protocol, Cross Domain Scaling and Safety Workstream). To-date the reporting has been at the level of the core unit, not the individual workstreams, therefore we intend to provide an extra level of insight. Initial planning suggests the following balance: ![|690x423, 75%](https://github.com/makerdao/mips/blob/master/MIP40/MIP40c3-Subproposals/supporting_materials/MIP40c3-SP68/pie.png) ##### Events & Travel * Events and travel will remain at existing levels to maintain a presence at industry conferences and meetings, ($12k p/person), with a small addition to cover meeting room bookings. ##### Hardware * Hardware budget will be maintained at the same level ($3k p/person) ##### Referral & Sign-on Bonuses * Referral & Sign-on Bonus shall also be retained as we plan on growing our team based on the above Salaries section. ##### Auditor Costs & Retainers * Auditor funding will be increased to account for higher market costs as experienced last year. Due to the fact that we have already paid for the existing retainer, we expect to be able to pull forward some savings here. ##### Gas Costs & Contract Deployment * Matching last year's gas cost usage for this line item. ##### Legal/Operating Expenses * To cover ongoing annual reporting, entity fees, and legal advice. ##### Contingency Buffer * The Contingency Buffer will be reduced from $200k to $100k as we have a better understanding of costs and cashflow requirements. ##### 3rd Party Contractors / SC Verification & QA * Continuing our engagement with 3rd party providers, including Certora and Runtime Verification. This tooling helps ensure our contracts adhere to formal correctness as well as support the development of new engineering tools. ##### Extending the Operation of the Emergency Multisig * As per the previous year, this multisig is only to be used in the event that the protocol has suffered a worst-case scenario event (for example, extreme de-peg or protocol loss leading to emergency shutdown). It is to be made available only to support a complicated wind down across multiple chains and eventually reboot the protocol. * The fund will cover; auditor fees ($356k), gas costs ($120k) and salaries ($1.8M) for existing employees, for 6 months in order to support rebooting the protocol, based on last year's running actuals. * The existing Emergency Multisig currently holds $1.5M. To support this request we are seeking to extend the current balance by $800,000, to bring to total multisig value to $2.3M. ##### Other Notable Items not Reflected Above * Any funds remaining in the monthly multisig from May 2021-April 2022 will be returned to the protocol in the first month of our new term. * The $100k bug bounty line item in our budget has been removed as it falls within the remit of the Immunefi Core Unit (IS-001). ### MKR Vesting * Existing core unit members are not requesting additional MKR as their vesting plan will carry over from 2021. * The proposed new team members (3 in total) if hired will vest at the same level as the rest of the team, prorated to a duration of 3 years, ending on April 30th 2025. * The MKR is equivalent to 248.75 MKR per person per year, over 3 years, including the 1 year cliff. At the time of setup, this will be administered via DssVest. * It is worth noting that last year's two MKR streams remain unused.