# MIP40c3-SP79: MKR Compensation for StarkNet Engineering Core Unit (SNE-001) ## Preamble ``` MIP40c3-SP#: 79 Author(s): @badgerofthe9d Contributors: Tags: core-unit, sne-001, budget, mkr-budget, active Status: Accepted Date Applied: 2022-08-08 Date Ratified: 2022-09-26 Forum URL: https://forum.makerdao.com/t/mkr-compensation-for-secu-members/17042 Ratification Poll URL: https://vote.makerdao.com/polling/QmWX6BSA ``` ## Sentence Summary MIP40c3-SP79 adds the MKR Compensation budget for SNE-001: Starknet Engineering Core Unit. ## Paragraph Summary This proposal contains the MKR Compensation budget for the Core Unit SNE-001: Starknet Engineering Core Unit, also called SECU in this subproposal. This proposal is based on [Alternative MKR Compensation Guidelines 15](https://forum.makerdao.com/t/mip56-alternative-mkr-compensation-guidelines/9230) and benchmarked on the [Protocol Engineering Core Unit (PE-001, PECU) budget](https://forum.makerdao.com/t/mip40c3-sp68-modify-protocol-engineering-core-unit-budget-pe-001/13797). It provides an average of 135 MKR per FTE per year over 3 years with a 1-year cliff. In total, it provides 270 MKR to CU members per year over 3 years with a 1-year cliff. The SECU is financed 50/50 by Maker and Starknet. The other half of the value of the incentive will be provided by Starknet with a mix of USD and Starknet tokens. The total value of the USD and Starknet token provided by Starknet CANNOT exceed the value of the MKR allocation in USD. ## Specification ### Motivation **About SECU role** PECU and SECU are working very closely to deliver teleport to make DAI the easiest stablecoin to use cross-domains in DeFi. In parallel, [numerous bridge hacks](https://forum.makerdao.com/t/bridge-hacks-review-and-learnings-for-maker-teleport/17549) have made us have an even more careful approach to designing and scaling teleport. PECU has dedicated team members focused on L2. We are playing a very similar role to those L2-dedicated PECU members. The difference is that we focus less on L1 contract, but more on translating Maker contracts into Cairo, as well as writing new contracts in Cairo, trust assumptions, ad hoc workflows to improve security for MKR and DAI holders (e.g., escape hatch, circuit breaker), and formal verification. SECU has had challenges in the past year to retain and attract talents due to the lack of incentives, which contrasts with the need for the highest standards in our CU. SECU has taken the approach to not ask for MKR compensation from the start, mindful of the fact that the team needed to prove itself and earn trust from the community before. **About deliverables** [**Phase I deliverables ](https://github.com/makerdao/mips/blob/master/MIP39/MIP39c2-Subproposals/MIP39c2-SP19.md#proposed-roadmap)** has been shipped before we started phase II. You can use the bridge [here](https://starkgate.starknet.io/). SECU has been working over phase I to strengthen the security of the bridge and recently shipped the monitoring infrastructure and the circuit breaker. We have had 30k + individual deposits on the bridge and we have seeded the first ETHDAI AMM on Starknet. Phase II [deliverables](https://forum.makerdao.com/t/starknet-wormhole-implementation-details/12042) were: fast withdrawals, wormhole (now teleport). Fast withdrawal contracts have been audited and are ready to be deployed, and we have so far rewritten more than half of the contracts required for teleport in Cairo, we are still working on tests. The timeline for deploying teleport has been pushed back as organizational as well as technical challenges had been underestimated by PECU and SECU. You will find more details in the post from Derek [Layer II Roadmap - History and Future](https://forum.makerdao.com/t/layer-2-roadmap-history-and-future/17310/7). **About MKR compensation** Many possible frameworks for MKR Compensation have been put forward in the DAO, providing solid principles for MKR compensation that are incorporated throughout this proposal. Our core unit MKR compensation should be very similar to that of PE-001, given the nature of the work we do at the SECU as described above. [Alternative MKR Compensation Guidelines 15](https://forum.makerdao.com/t/mip56-alternative-mkr-compensation-guidelines/9230) suggest a 1.5 multiplier to calculate the MKR compensation, which we are using. Note that out of this 1.5 multiple, Maker is only paying 0.75, Starknet is paying for the other 0.75. The rationale for having a compensation aligned with PECU is based on the fact that dedicated engineers are doing a very similar job with PECU, but focused on EVM chains. One year ago, we decided to create a separate CU for Starknet because the overhead of diving into trust assumptions, learning Cairo, adapting user processes to Starknet trust assumptions, and formal verification would have been a distraction for PE. Additionally, it allowed Maker to only pay for 50% of the total budget and have Starknet finance the other half. ### Core Unit ID SNE-001 (Starknet Engineering Core Unit) ### List of Budget Implementations **Eligibility** Anyone currently working for SECU, who has not given notice at the time of this proposal, is eligible for MKR Compensation. Eligibility Period is from September 27th, 2021 until August 5th, 2022 for this proposal, dating back to the inception of the Core Unit. All the members of the Core Unit who are eligible have joined the Core Unit on September 27th, 2021. Eligible MKR compensation will have a cliff of 12 months, meaning SECU contributors will receive their MKR one year after the end of the eligibility period. **Formula** For all members of SECU, MKR Compensation will be derived based on the salary earned within the Core Unit during the retroactive eligibility period. We will be using the 1.5 multiplier proposed by Aes in [Alternative MKR Compensation Guidelines 15](https://forum.makerdao.com/t/mip56-alternative-mkr-compensation-guidelines/9230). This number is then divided by 2 to account for the equal budget split between Maker and Starknet. The MKR price used is the 3-month average of $1109 (source: CoinMarketCap). **MKR transfer** * One-off transfer on September 27, 2022, of MKR 270. Representing the MKR payment for one year of work after the cliff. Paid from the Pause Proxy to 0x6D348f18c88D45243705D4fdEeB6538c6a9191F1 * Stream of MKR 540 from the Pause Proxy to 0x6D348f18c88D45243705D4fdEeB6538c6a9191F1, starting on September 28, 2022, ending on September 28, 2024