[Budget-001] 2022 Q1 - Spending Budget

Title: Q1 2022 - Spending Budget
Author: @keeevin
Budget Proposal: BUDGET-001

Budget Summary

This proposal establishes the following budgets for 2022 Q1:

WG Spending Category Budget Description
Operations Legal Fees $45,000 General legal fees relating to tax, drafting documents, and general legal consultation
Engineering Bounties $10,000 Bounties for DeWork bounties board for solving Github issues
Operations Bounties $2,000 Bounties for DeWork bounties board relating to operations tasks

Budget Details

Fast-tracked Spending

If passed, this proposal will enable spend against the above budgets without a 3-day minimum discussion period (i.e. going directly to Snapshot voting).

The Snapshot proposal would reference this budget proposal (BUDGET-001).

Budget Rollover

Allocated budgets do not roll over to the next quarter.

For example, if only $6,000 of the $10,000 budget allocated to Engineering Bounties were spent in 2022 Q1, then the remaining $4,000 budget will expire.

Edit: the $4,000 budget would only expire if no one picked up the bounty. If the bounty was picked up, then the expense for the bounty would be applied to the $4,000 budget from Q1.

Excess Spend

Spend is only approved up to the budgeted amount for the quarter. If actual spend exceeds budget, the excess amount will need to be discussed and voted on.

Value Propositions

Discussion on Merits of Proposals

Proposals for spending budgets will give DAO members an opportunity to thoroughly discuss the merits of each spend before it reaches Snapshot voting.

Eventually, all budget line items should have a corresponding issue in GitHub where progress (and remaining budget for each) can be tracked

Improved Forecasting

Spending budgets allow for better predictability on what we’ll spend on and when we’ll spend it.

They’ll also improve our contributor onboarding experience because there will be alignment on the contributors’ deliverables, allowing them to get started working quicker.

3 Likes

Thanks for your thinking on this! I agree that it is helpful to be able to forecast these expenses going forward.

A few questions/comments:

  1. Do approved budget items need to be completed in the same quarter for which they are budgeted? The answer to this question may also be related to the “Budget Rollover” guidance which I otherwise agree with.
  2. I would like to change this line: “Eventually, budgets should also reference a roadmap item” to something like: “All budget line items should have a corresponding issue in GitHub where progress (and remaining budget for each) can be tracked”. If we had these issues, then we could link them to various related roadmap items.
  3. Are there not other operating costs that need to be budgeted? What about things like storage/compute costs (AWS and others), ENS domain registration, event sponsorship, etc.? How are those accounted for today?

Thanks for these questions and comments, @evanjacobs . See my responses below:

  1. Do approved budget items need to be completed in the same quarter for which they are budgeted? The answer to this question may also be related to the “Budget Rollover” guidance which I otherwise agree with.

This issue relates to the timing of when expenses are accrued vs. when they’re actually paid out.

To illustrate, say we post up a $1,000 bounty at the end of Q1 2022 (March). A contributor picks up this bounty in March but doesn’t complete it until May. Even though the payout is in May, we’d incur the expense in March which is recorded against the Q1 2022 budget, not a Q2 budget.

In the event that the contributor drops the bounty, the $1,000 budget from Q1 2022 would expire.

  1. I would like to change this line: “Eventually, budgets should also reference a roadmap item” to something like: “All budget line items should have a corresponding issue in GitHub where progress (and remaining budget for each) can be tracked”. If we had these issues, then we could link them to various related roadmap items.

Updated.

  1. Are there not other operating costs that need to be budgeted? What about things like storage/compute costs (AWS and others), ENS domain registration, event sponsorship, etc.? How are those accounted for today?

There are others. I will propose them in [Budget-002].

Thank you @keeevin!

Most of the budget goes to legal expenses. I assume that this is related to specific circumstances, not ongoing quarterly expenses.

Could you provide more details with respect to this budget? Is there already a quote offered by a legal counsel? Or will it be done in a separate, fast-tracked proposal?

Thank you!

Thanks, @philh.

Most of the budget goes to legal expenses. I assume that this is related to specific circumstances, not ongoing quarterly expenses.

We engaged U.S. counsel and U.S. tax consultant.

The $45K budget is my estimate of amount due to U.S. counsel and U.S. tax consultant for work that will be done for the past few months until end of Q1.

Could you provide more details with respect to this budget?

The U.S. counsel provides general legal services.

The U.S. tax consultant’s services relate to identifying potential tax implications.

I expect the U.S. counsel’s fees will consume most of this budget.

Is there already a quote offered by a legal counsel?

We received standard hourly rates. Please let me know if you’d like to know their rates specifically.

Given the nature of the engagement, it is difficult to estimate the overall amount of time, and level of legal and professional fees, that will be required.

Or will it be done in a separate, fast-tracked proposal?

In the event that our legal fees end up going over the budget, I’ll create a separate forum post to request an increase in the legal budget. The excess amount will not be fast-tracked.