# 3. Budgeting

## Summary

This MIP proposal contains a framework for managing budgets and modify them in the DAO Primitives State MIP.

## Motivation

Budget MIPs drive funding and coordination around Core Units. Governance needs to be able to manage and prioritize Core Units.

## Specification / Proposal Details

### 1. Budget Overview

- Budgets are used to fund the work necessary to fulfill the Core Units chosen by Maker Governance. A budget is attached to a Core Unit and is meant to only be used for that Core Unit. Facilitators administer the budget, ensuring there is a transparent accountability into how the budget is spent.
- Budgets are mainly spent on paying Contributors, which are a diverse set of roles that encompass anyone who works on a Core Unit, funded through a budget and administered by a facilitator. Examples of Contributors are:
- Full time employees that work solely on a specific Core Unit for a specific Facilitator
- Freelancers that work for bounties or grants on a broad range of different Core Units
- Contributor Companies that work on a long term contract with a Facilitator to contribute to a Core Unit
- Contributors can take many more shapes and sizes - the main thing they have in common is that they are funded by Core Unit Budgets.
- Core Units have both a Total Budget Value, and a budget breakdown. The Total Budget Value is binding and directly determines how much can be paid out from the budget in the Budget Payout Process. In contrast, the budget breakdown is non-binding, and is only used to inform the reasoning behind total budget value, so Maker Governance can more easily make a decision.
- A crucial feature of the budget system is that it gives facilitators the flexibility they need to modify the budget breakdown, if conditions change that means it is necessary to spend the money differently.

### 2. Modify Core Objective Budget Sub Proposal Process

- This sub proposal process modifies the budget and budget breakdown entries of a Core Unit
- Once a sub proposal passes, the domain state is updated to modify the Core Unit specified with the new values for budget and budget breakdown
- The proposal parameters are: feedback period: 1 month, frozen period: 1 week
- Template:

c1: Core Unit name

c2: total budget value

c3: budget breakdown

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### 3. Budget Payout Process

>!!!!! All of this is obsolete and should be replaced with a technical component for manipulating kegs (payment stream smart contracts) from the start

- The facilitators or interim facilitators attached to a core objective can by unanimous decision request a budget payout, which results in the bundling of a budget payment and/or incentive payment, up to the maximum valid amount for their Core Unit into the next Weekly Executive Vote in the form of manual `suck()` calls. The entire monthly budget can be paid out the first week of the month.
- In the case of a Core Unit with an active budget, but without an attached facilitator, a fallback process applies. The fallback process allows a simple majority of all facilitators to use their Maker forum accounts to specify one or more interim facilitators to a Core Unit. As soon as a Interim Facilitator has been specified on the forum, the Interim Facilitator becomes able to request budget payouts for the Core Unit, in addition to the Core Unit they are permanently attached to.
- ***Operational Support Unit*** must maintain a guidance document with up to date budget and incentive values.
- A budget payout request is made by a facilitator publishing a simple forum post in the Maker Forums detailing the specific payment amount, the source (budget or incentive for a specific Core Unit) and the recipient address.
- The ***Governance Unit*** must facilitate this process, including reasonable security measures against threats such as forum account spoofing or hacking. The governance objective must maintain a guidance document that details this process.
- This component is planned to be replaced with an amendment that will implement more sophisticated technical solutions for the continuous payout of valid budget and incentive payments without requiring a manual process during normal operation.

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