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DCG Budget Planning Update (Q4 2018)

Discussion in 'Finances' started by glennaustin, Oct 18, 2018.

  1. glennaustin

    glennaustin Member
    Dash Core Team

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    What is the objective of this post?
    This post is another update on the budget proposals Dash Core Group (“DCG”) is planning on submitting to the network over the next three budget cycles. As previously communicated, these posts will occur at least on a quarterly basis. In combination with the Dash Core Group quarterly reviews this should present a comprehensive perspective on the DCG budget in the near and medium term.

    Note that the amount of Dash requested is based on an estimated price of $160 / Dash. If the price increases sufficiently, it could reduce our anticipated proposal figures.

    What will drive your budget proposal strategy over the next 3 months?
    Run-rate compensation expenses will continue to drive the bulk of our proposal requests over the coming three months. In addition, we plan to continue building our buffer in small increments each month to provide more security and stability against future impacts of price volatility. 3Q 2018 was an extremely challenging quarter given the continued drop in the price of cryptocurrencies, including Dash. However, DASH declined much more slowly last quarter, which helped ensure our income aligned with our planned expenses. All of our upcoming expenses have been examined through the lens of what can we do to reduce or avoid spend while still delivering on our objectives. We have taken a number of actions to reduce our run-rate which can be found in our previous post:
    https://www.dash.org/forum/threads/dcg-budget-planning-update-q3-2018.39421/

    In addition, individuals on the DCG board and senior staff members elected to voluntarily reduce their own compensation rather than reducing team size or impacting compensation rates. This action was taken with the understanding that reduction will remain in place until the desired core team compensation budget buffer is established and the Dash budget can sufficiently cover our ongoing run-rate costs. This will help accelerate the pace at which we can build or buffer. While individual situations and ability to reduce compensation varied, the cuts amounted to approximately 45-50% of the volunteers’ compensation.

    What are the specific proposals you anticipate posting for the November 1st, December 1st and January 1st budget cycles?
    The following proposals were already posted for the November 1st cycle:
    1) Core Team Compensation: 2,860 Dash for compensation for core team members. This will allow us to sustain our current run rate, while still building up our buffer

    2) Business Development: 845 Dash

    December 1st cycle:
    1) 2,860 Dash for compensation for core team members. Depending on the price of Dash, this will allow us to sustain our current run rate, while still building up our buffer. The amount of this request will remain at least 40% of the total amount of Dash the network has available each month, until our compensation buffer reaches 6 months' worth of run rate.

    2) Marketing / Communications / T&E: 845 Dash. The specific details of the request will be shared in the proposal. This budget is approaching depletion, so we will need to submit a new proposal for anticipated expenses.

    January 1st cycle:
    1) 3,185 Dash for compensation for core team members. Depending on the price of Dash, this will allow us to sustain our current run rate, while still building up our buffer. The amount of this request will remain at least 40% of the total amount of Dash the network has available each month, until our compensation buffer reaches 6 months' worth of run rate.

    2) Public Relations: 300 Dash (3 months of run rate)

    3) Premises: 220 Dash (6 months of rent)

    Note: No budget for taxes is requested. Fiscal Q1 2019 (July - September 2018) estimated taxes were paid the week of October 12th. We have sufficient reserves in our tax account to cover our quarterly tax liabilities (quarterly payments are required by the IRS and will prevent a large tax bill due for fiscal year ending June 30, 2019). There are scenarios in which we may require additional funding, but only if the price of Dash were to increase significantly.

    For all accounts we are building a fiat buffer to prevent DCG operations from being disrupted if the price of Dash declines substantially (e.g. core team compensation, business development, marketing, premises). The exception is our tax buffer, which is held in Dash (since the eventual size of the tax liability is highly correlated with the price of Dash).

    Overall, our financial condition at $160/Dash is stable. We are slowly able to continue rebuilding our core team salaries buffer while adequately funding the other accounts, and refraining from requesting proposal funding in excess of 60% or more of the available Dash budget in any month.
     
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